It wasn't a massacre of peaceful students, but a skirmish between PLA soldiers and armed detachments from the pro-capitalist / free market reform movement. The protest movement, as evidenced by their own accounts, called for market liberalisation, and free market reforms, rallying around a replica of the statue of liberty. After the movement had been building in the square for seven weeks, unarmed soldiers were sent in to disperse the protesters, after which many soldiers were beaten to death, torched, and lynched. The New York Times death count went from 2600, to many thousands, to 8000, to tens of thousands. In reality only around ~200 (including soldiers) were killed or trampled, in smaller clashes outside the square. The on-scene New York Times reporter disavowed the article, especially about machine-gunning of protesters. A wikileaks cable from a US ambassador to the US state department, confirmed that no killings or machine-gunnings took place in the square.

Well, one could say it doesn't make sense to let people rally nowadays for this, since there's probably counter intelligence funding that's propelling the massification of this news and so on, so why would you let some people go and complain that you suppressed a US coup d'Etat attempt?