De Menezes was clearly not carrying anything, so to identify him as a potential suicide bomber was pretty much impossible. Also consider that they let him travel on the bus (two, iirc) - presumably they also count as public transport and can also be blown up - but waited for him to go into the tube and executed him there.
Having spent a fair bit of time looking at this and related events from that time, my feeling is that De Menezes was indeed the target.
Cressida Dick has enjoyed quite a ride since then; call me old fashioned, but being in charge of genuine #### ups that end in the death of an innocent doesn't usually result in being promoted to the top job in your field in the country; that treatment is usually reserved for people that get the job done how it's supposed to be.