A couple random thoughts. It's amazing how much is going on in each episode. A typical hour-long drama today has an A story, a B story, and maybe a C story that's more comedic. [David] Milch is giving us A through G stories. One advantage he has is that the show runs 49+ minutes. An episode of Monk in 2009 is 42+ minutes.
My response is not profound by any stretch, but gave me a chance to express my admiration for an experiment in television-show narrative (a tight set of rules there, to be sure!) that today seems easy but in '83 was hard to get past the network ratings worry-warts:
You are right that Milch gives us stories A through G. And maybe H. One of us should count them all up. Someone years ago tracked them all across a season, charting which were maintained across episodes and for how long, which died out in a single episode, etc.
I believe it was in the very first show of the series, ep. 1 season 1, that two characters whom we immediately knew would be mainstays, Hill and Renko, were shot and presumably killed about halfway through the episode.** This was much commented-upon at the time. What a disruption of TV conventions! Introduce two characters and then kill them off, and not even at the end of the individual episode, let alone the end of a season! Threw us all way off, and we knew right then that we had to pay attention to our expectations and be prepared for them to be violated.
The formal/structural violations of course mirror the crazy frenetic anything-can-happen early 80s urban reality being depicted. For me, as a longtime TV watcher whose favorite subgenre was the one-hour 9 PM or 10 PM drama series, this was the first time I truly experienced that form/content jibe.
Helter-skelter reality --> handheld camera, ensemble cast, crazy audio techniques, random elimination of characters, many plots going at once.
** Episode was entitled "Hill Street Station" and aired 1/15/81. Official plot summary is: "A hostage situation arises in Captain Furillo's precinct. Public defender Joyce Davenport is looking for her client, lost due to bureaucratic mismanagement. Officers Hill and Renko are shot in the line of duty." The episode was awarded an Edgar for Best Teleplay from a Series.