In my state, personal fireworks are illegal and people use them anyway at all sorts of crazy hours, even days before the fourth of July. They're a nuisance, especially to people with pets. Everyone should be more courteous to everyone with regard to that.
I can't speak to the avoidance thing generally, but it seems like if it were one set time for the city you could at least prepare however you wanted (wearing earplugs etc.).
I think it's the randomness of it that is probably terrifying to some combat veterans. Not to mention that they go on and on. It's not just the city show (which we also have) but the random firecracker at 2 AM two days later or two days before.
With all of the excess sentimentality and deference that we as Americans tend to have for veterans and the military, I find it annoying that we have to analyze why we can't give one incredibly small tangible thing to veterans who have been in combat. We have to take away one thing some of them ask for because they aren't coping the way we'd like them to. Yet we give them so many false platitudes they don't ask for. Maybe you're technically right that it's enabling. Who cares. As if we ever measured the value of their mental health and life seriously enough against the necessity of sending them into combat to begin with. Why start now with nitpicking how they choose to cope in their own neighborhoods.