Sorry. I get your meaning now. And you're right, and the word "And" is part of the linguistic flag here:
pull it = demolish the building
"I remember getting a call from the Fire Department commander, telling me they were not sure they were gonna be able to contain the fire, and I said, you know, 'We've had such terrible loss of life, maybe the smartest thing to do is just pull it (to demolish the building).' And they made that decision to pull (to demolish) and then we watched the building collapse."
If we assume that pull it means to pull (the plug on) the operation, to stop the operation, then the second pull doesn't fit grammatically, because it would have to carry the same meaning. It'd have to be "....they made the decision to pull out ...", a different verb altogether.
The problem here, or rather the apparent problem, is the phrase pull it. It's ambiguous, that is, it has two potential meanings:
1) to end an operation, to pull out of an operation
2) to demolish a building
If the idiom pull it means to pull out of an operation, then its base verb form to pull should follow semantically. That is, in order to keep the same meaning, which is evident by the speaker's use of the conjunction "And" which connects the two sentences, to pull would have to be to pull out.
In short, you are correct. Good eye! Pull in pull it and to pull means to demolish, not to pull out. To pull is short for pull it.