@Don:
He saw what panic was caused and that he had to act quick.
He knew many were after Doffys head, including Luffy.
He decided to let them handle it, while he could do something for the civilians.(who otherwise would have noone)
But that is just one point you have to take into the equation.
And when the result is for you, Fujitora should have stopped Doffy non the less, well thats your thinking. I could see a character who was introduced as a gambler taking that "risk".(Letting out, that he still could react when it
s getting even worse)
No, Issho lamented himself to Sabo it's absurd they can't be the heroes, meaning it's preposterous to him their hands are tied despite what Mingo has done. Then, he questioned the WG's justice either because he has been denied of the authority to arrest Doffy (beforehand) or he knows they would simply repeat the cycle, re-instating another one and covering up the circumstances, if the marines defeat and arrest Mingo themselves. So basically it's possible Issho plans to force himself into the same position Smoker resisted after Croc had been defeated so the former can make the same decision as the latter. But Issho isn't in Tashigi's situation where she had no power but to rely on pirates.
By betting on Luffy he meant he sees an opportunity to circumvent his limited options and damage the Shichibukai concept, thus sating the screams of anger as he described. The citizens' safety isn't the immediate topic here, Issho's marines would have taken care of them either way, it's the fact that the WG disregards people while continuously defending the Shichibukai concept. Otherwise Issho would have focused on the crying screams in his metaphor instead of the enraged ones.