I have to wonder: if it's not illegal to have an open wifi network, why is the police department wasting resources advising people on what is mostly a civil matter (violating the terms of agreement with an ISP, or copyright infringement)?
More important, what about the benefits of open wifi networks? The Electronic Frontier Foundation puts it best:
Missing from the [police department's action] is any recognition of potential benefits to be gained from publicly sharing one’s wireless access point. Lately, the virtues of contributing to any shared commons tends to be overshadowed by fears of bad actors (both real and imagined).