I think this part is pretty key, and has always been a big open question in my mind:
"The court further recognized a potential problem in assessing reliability related to handler cuing, as even well-trained dogs could respond to subconscious cues from their handlers. For this reason, the court determined that a critical factor in determining reliability is the record of false positive alerts made by the dog."
The subconscious cues, or even deliberate cues that only the handler and dog know, could allow an officer with ill intentions to make some kind of signal only known to him and the dog, which causes the dog to make an "alert", giving the cop probable cause.