This happens pretty regularly here in Brazil, some kid getting killed by cops thinking he was armed, or in the crossfire of something else.

It's complex, as the inhabitants of favelas really are all sorts of people, there for many different reasons.

It's not as simple as good guys versus corrupt police, I'm afraid. Favelas are rent and bill free, siphoned/stolen electricity, cable, internet, water, and no land rates, and many are recipients of Bolsa Familia, a family benefit given by our extremely socialist-leaning government. Many of these people live like this generation to generation, not because they've not had the opportunity to leave favelas, but because the lifestyle is nearly completely paid for by the government. Is it glorious? Hell no, but when you've grown up with little, you settle with little, and when you've grown up not paying for much at all, why would you enter into the formal system where you pay for your existence and consumption?

Yes, there are many that are there as honest, hardworking people, there by circumstance, who would love to leave, and unfortunately have not been able to... but as I've explained, not everyone in the favelas is downtrodden. A great many choose a subsidised life, not to assume formal employment and pay taxes and land rates, and instead to earn money through drugs and crime. Our justice system is also a piece of shit, and youths can commit murder, not be imprisoned, and have their records wiped completely clean by the time they're 18. At that point, they have killed, robbed, and committed acts of violence numerous times, and have grown accustomed to the ease of such a lifestyle, and are hardened, accomplished, violent criminals that the system will often lightly punish, if at all.