That was a wild scene for sure. I've always maintained (on just a hunch) that someone was not happy that Dream Theater's late start was going to interfere with the Saturday night dance club so they called the fire marshal to end the show. Keep in mind that every Saturday that venue turned into a dance club after the prime time rock shows.
It was odd that Dream Theater played for 75 minutes by that point and then it was shut down. Also, I noted that the following evening when DT played at the same venue, there weren't really any less people. My guess is that the promoter of the dance event intervened when he showed up to start his gig and realized it things weren't on schedule that night. Or the club felt like it had to honor its commitment to its weekly booking. Again, i say this with no proof - just a hunch. I hung around after the cops cleared out the club and sure enough all the velvet shirt dance goers arrived.