Great question. Edward VII is widely regarded as a great, but short-reigning, English monarch, but there were definately some areas in which he made poor decisions;
1) Edward was largely critisized for his lack of "connection to the comman people" For most of his life he was a reculse, preferring to bask in the luxary of the royal lifestyle rather than get involved in politics. As a result, he was underprepared for his eventual assention to the throne. Even though he admitted this flaw, he continued his "hands-off" style of rule.
2) Although Edward was a liberal ruler with great respect for people of different nationalities, he did not support Women's voting rights or Irish Home Rule, both of which became serious issues for future monarchs.
3) Although he recieves high marks for his handeling of diplomatic matters, he had a poor relationship with Wilhelm II of Germany. Edward suspected that the German ruler would soon start a war (which he did 4 years after Edwards death) but did little to try and prevent it through talks. In fact, historians argue that he encouraged the onset of WWI by greatly expanding the reorganizing the army and navy.
I hope this helps. Feel free to contact me if you need more information. Here is a link to a book you might also find helpful.