There's so many failures to it. The company apparently thinking the professional scene drives the player base, the company apparently thinking it's responsible for 100% of the balance of the game, not realizing "the meta" plays a huge role towards that end. Because of these Blizzard was way too conservative and the game ended up just not being fun. Once the game is not fun, the player base leaves. Once the player base leaves, the professional scene dies.
The most egregious error might be the company not having a genuine designer in charge of the game, which to me seems like a very corporate-y lack of respect for game design. SC2 as a whole was way too conservative. And this is just on the design side, there was greed and short-sightedness all over the place.