I agree with you until the very last paragraph.
I don't think it's entirely fair to not consider that the steps to fixing this problem are going to involve individual racism. Sure, you defined institutional racism as policies, and you claim the police force is part of an institution (which it is), but.. police are made up of individuals that suffer from individual racism, which contributes to why institutions are like that. Institutions aren't actually their own separate consciousness that make up their own racist problems.
The problem is that individual racism seeps into institutionalized racism.
Again, if we ONLY claim this is "all about skin color," it opens the way for stupid arguments like "but if it's about race why don't these people just act like these other people" (aka, the "but President Obama is black and he's fine so these people should just stop acting like that and they won't get shot" argument).
I honestly, honestly think that understanding how class is the biggest and primary factor in the culture of violence (and the culture of education, and the norms of behavior) [as opposed to just race/skin color], is going to be necessary to reduce/end institutional racism.