Just to clarif in the OP, the SAS did not kill all the terrorists during Operation Nimrod. One survived and was paroled in 2008.
As for their actions that day, they were dealing with terrorists who had already murdered one hostage. Despite any apparent attempts to surrender one the building assault began, I doubt the troopers were going to risk being 'mugged' by any who may have held their hands up, only to have a grenade or some other weapon concealed about their person.
They'd been asked to 'surrender' by the Police. They declined, escalated the situation and subsequently 'reaped the whirlwind'.
As for Osama, do you REALLY think that the world's most wanted man and his entourage would be tucked up in his little hovel with nothing more to defend himself than kitchen utensils? With all that close security, CCTV and 14 foot high walls, combined with security gates that cost more than half a million dollars, I'd wager that there might just have been the odd AK47 knocking about the place!,