The security checks on small flights like these is a world away from the rigorous checks and double checks you have to endure when getting on a regular commercial jet. It's likely that the checks done were woefully inadequate, so it isn't so much of a surprise that they managed to get it aboard.
Unfortunately, this shows just how poorly people react in these sort of situations, a crocodile that small is not going to do any harm whatsoever; so although very tragic these people ultimately brought about their own demise by ignoring the requirements to remain in their seats and thereby destabilising the plane. Obviously, the crocodile should never have been there in the first place, but the course of events after it was discovered lacked any thought about situation.