The distinctions that we draw in search and seizure jurisprudence are sometimes such fine ones.
The Supreme Court says that "headlong flight" plus "narcotics area" plus "has a bag" lets you search. At least at night. But what if it's just a normal "flight" -- not really all that speedy? What if it's only described as a "high crime" area? What if it's during the day? What if there's no bag?
Here, the Court of Appeal says "normal" flight plus "high crime area" plus "during the day" doesn't give you the right to search.
At a more abstract level, it seems like the police just wanted to swoop down on this one alleyway -- where gang members gathered -- and search everyone there. Maybe on the theory that they had probable cause just because there was, typically, a lot of crime there. Or maybe in the hope (and expectation, likely) that someone would run, and boom, all of the sudden, probable cause.
Which works from a policing standpoint. Less so for the citizens standing in the alleyway.