Until a person commits an act of terror, they are not yet a terrorist. They may simply be a person carrying a suspicious package or driving a truck near a crowded area. For the most part, telling people to shoot terrorists is reckless and will only serve to put innocent people in danger.
People are naturally paranoid and with the media fueling the fire citizens hunting for terrorists are like a ticking time bomb. Paranoid citizens will see terrorists on every corner and more than likely will shoot innocent bystanders. This kind of thinking is what is wrong with the world today. We need to educate not incite.
Although I think we all need to be vigilant and aware of what's going on around us, this mandate probably isn't the best thing. In an active shooter situation, I hope that as many people as possible would try to go after the assailant. However, some over-zealous people probably think of this as the opportunity to shoot at anything remotely suspicious.
This could end in catastrophe. No government should ever instruct its citizens to do something like this. This will make life even more difficult for the Muslim minority in Czech Republic, and could result in Muslims, or anyone who looks vaguely Muslim, being shot in the street because people will claim that they are terrorists.