This is a very vexing question, jake.
I have a close relative who is with Special Branch. His work has taken him into the situations under discussion here and I have often spoken to him about the difficulties such work presents. I have to say that I have conflicting views on this work, especially the “agent provocateur” type of activities.
I believe there is little doubt that without such work a large amount of organised criminal activity would go undetected. I therefore believe that such work, whilst perhaps unpalatable to some people, is vital. Your question “how far should they go”, though, presents me with a dilemma. Normally I would condemn any action that might encourage others to begin or continue with criminal activity. However, I believe there is a line (which I have drawn) which has on one side people who might be persuaded with a bit of a nudge to commit crimes whilst on the other there are those already involved in crime and would continue their activities whether nudged or not.
In my (admittedly simplistic) world, provocation by undercover police is not justified in the former, but fully justified in the latter. But of course, the line is not always easy to draw and that is where the justice system has to make judgements on what is acceptable and what is not.
In this particular case if the officer had not “turned turtle” I imagine his activities may have been ruled as acceptable. In my simplistic view I imagine the judgement would have to be made on the question of whether the miscreants would have undertaken their activities without his involvement. It seems highly likely that they would have done and his interference made little difference to their actions.
But the end cannot always justify the means and without much more detail (which we are not going to get) I suppose we cannot really say whether he had gone too far or not..