Bureaucracies are inefficient and wasteful. Various forms are required for any operation; sometimes, incompetent people have positions because of nepotism within the organization.  Joseph Heller captures the absurdity and inefficiencies of the military bureaucracy in his novel Catch-22--you can glean a clear picture of the problems by reading this satire.

Bureaucracy reduces effectiveness at delivering product or service that the system was designed to.  From a consumer/citizen side, it causes a loss of faith that the system is either helpful, or that it exists for their benefit.  The constant frustration followed by this loss of faith causes people to disengage from the system itself, again, defeating the mission.

From the organizational perspective, bureaucracies can create sclerosis in the organization.  People can become obsessed with following rules and procedures instead of doing the job most effectively.  In this way, the emphasis on rules that comes along with a bureaucracy is very problematic.

Weber's main concern was that bureaucracies could lose sight of their purpose and begin to act as a special interest group. In other words, they might exist for their own sake, rather than to meet some societal need. Weber was also concerned that the "idolization of bureaucracy" might stamp out individualism. Bureaucracy tended to expand, for the reasons cited above, and Weber expressed a wish that some countervailing force needed to be opposed to what he called "the parceling out of the soul." Modern concerns about bureaucracy tend to come from the opposite point of view. Weber thought that bureacracy was so ruthlessly efficient that it would become too powerful. Modern criticism of bureaucracy have tended to focus on the idea that bureaucracies are bloated, inefficient, and overly expensive. 

http://www.faculty.rsu.edu/users/f/felwell/www/Theorists/Weber/Max1909.html#Max