You have to look at the broader world context. This wasn't just a simple protest. This was a Western backed movement (even wikipedia acknowledges the CIA was actively aiding the movement) to overthrow the Chinese government happening at the exact same time similar movements were ending socialism throughout the entire Eastern bloc. This entire purpose of a socialist state (we can debate about whether the PRC was one at this point, or w/e, but they at least ostensibly were) is to defend socialism against counter-revolutionaries. Is that not what happened here? If anything I think the response was rather lax.

If the leadership of the DDR, USSR, Poland, etc. had taken decisive action like this, then they wouldn't have collapsed. Of course, that would required them to not all be miserable revisionists; which they sadly all were.