I'd like to add my understanding of this, through my gameplay experience.
An Evidence Correlation Holographic Overlay (ECHO) is a projected reconstruction of events at a location. It is created by the Agents shade tech and ISAC. When your system identifies a location with an ECHO, you'll see the scan start, as your shade tech system analyses the surrounding area and collates information at the scene.
The analysis seems to cover local debris, smartphone data, CCTV footage as well as an estimated projection of events, and also collates against known Division data. This data is all then converted into a visual representation of the scene, for the agent to investigate.
“It’s part of our agents’ tech set,” Barnard says. “In certain areas,
it can basically accumulate all the digital data that’s available.”
This includes everything from closed-circuit cameras to telephone
conversations and more. All this info comes together to form a frozen
three-dimensional moment, sometimes with audio attached. Agents can
wander through these ECHOs, interacting with the image to find
important elements that reveal valuable intel about your immediate
surroundings, provide insights into the larger mystery of the pandemic
that devastated New York, even nab some hidden loot.
~ Game Director Ryan Barnard
I would imagine that ECHOs are only available in areas where these is CCTV and a great deal of debris and/or local indicators, such as tyre marks indicating a car.
In the Police Academy mission, you do see that the ECHO system relies heavily on shade tech, and that it can be hacked to conceal details of the ECHO from ISAC. Agents also have the ability to record ECHOs using their own shade tech, as we see in the Unknown Signal mission.
If anything, I would look upon an ECHO as a visualisation of all available data about a location, not dissimilar to other video game crime scene investigations, such as Batman's investigation vision in Batman: Arkham Origins.