The color of red for pyrotechnic flares, is a basic color of most flares.
Your hand flares (via Flare Wikpedia), are more specifically called Fusee flares (or highway flares, road flares, or ground flares) and are commonly used to indicate obstacles or road hazards, and commonly found within road hazard kits. The only specific mention of the color red used to disinguish usage within the this Wikipedia article, are when the red flares are used within the terrain of the ocean, mairtime usage of flares. (ie. First topic under Civilian Usage; "Maritime distress signal", with the next topic being the definition of Fusee flares, and Fusee flare being used by everybody.)
I think what you're referencing with police usage, is probably within ARMA 3 Life servers? I tend to agree, if there's a vehicle on the road and many people are driving their OpenGL car/vehicle down these very narrow ARMA 3 highways, people should drop flares forewarning of an approaching parked vehicle convoy or accident. ;-)
Basically, every truck or commercial vehicle would have a road hazard kit containing road flares. Civilian vehicles would be optional, but can be somewhat myself, I also have road flares within my own privately owned vehicle! I currently also reside within a far more rural area of Alaska than most of you folks, having adequate emergency response services. (Or a cop for every city block.)
Not a night goes by within ARMA 3, when somebody parks in the middle of the road/highway causing a accident. But they also have to be adequately intelligent to also get out & deploy flares, versus just running off naked!
As I previously mentioned within my last post, the likely rational for flares is for daytime use, as smoke only lasts for a few seconds. Road flares are designed to last far longer, and at the same time do emit quite a bit of colored smoke, aside from the bright light which is also seen in bright daylight. (ie. From Fuse WIkipedia, "... fusee, which burns for 10–60 minutes with a bright red light." Yes it would be nice to have a daytime signaling device lasting far longer than a smoke grenade!)
Doing a little more reading of Flare Gun Wikipedia, and finding flare guns have been used as weapons, with destructive or lethal power. As the boats or navy arena grows within ARMA 3, boats are also going to require flare guns.