Let's consider this...
It happened on a sunny Sunday afternoon - broad daylight - in a residential area that by some accounts is a good, quiet area.
The neighbor may (or may not) have known the berserk neighbor personally (no indication). He ran down to the neighbor's driveway where the killing occurred. (Fitness condition unknown.)
He may (or may not) have seen the 11 year old boy present at the scene.
The boy's father approached him with the knife, yelling "kill me!" - something I'm sure that startled and/or frightened him. (it's wholly unexpected by your average Joe.)
He fired 3 rounds. Nominally we can say it was likely to be under 15 yards presuming he was at least near the curb. It's rarely longer than that to a gargage door.
He may (or may not) have had to worry about making the shot with the youngster in the background.
In the sudden rush, it would not be uncommon for him to pull his shots right. Why? Sticking the finger all the way into the triggerguard and yanking on the trigger usually pulls the shots right (RH shooter) and hits the suspect in the left side of the body.
Presuming the shooter-neighbor was your average gun owner without hours of dedicated training (or even with minimum CCW training) I think he did okay.
At a guess, he arrived on scene too late to help the deceased. If he was reluctant to kill his neighbor, especially in front of the boy, he sought to incapacitate rather than kill. If he missed, he stopped shooting when the assailant turned his knife on himself (no longer a danger to the shooter). In short, he was within the law just about any way you try to twist it around.
Note: I don't know how many of you have heard the screams of a person (woman) in mortal peril. It's different than one of plain fear, such as finding something/one dead or being assaulted. There's a strange component to the scream that says "I'm going to die" as opposed to "someone help me!" I think it's a very-high-frequency note in the scream. I've heard it twice and can tell you that one scream is "help" and the other is "I'm about to die" (even if just a belief, not in fact).