There are a variety of reasons why the final product of the intelligence cycle can fail. Some of these have to do with difficulties inherent to the process of gathering and analyzing information. Others are more of “unforced errors” that come about due to problems within the intelligence community.
First, it is simply very difficult to gather some kinds of intelligence. With the US’s technological capabilities, it is relatively easy to get pictures of physical features on the ground. However, it is very hard to get intelligence about things like what is inside buildings and what people intend to do. This helps to explain why, for example, the US was unable to correctly determine if Saddam Hussein had WMD and what Al Qaeda intended to do in 2001. Finding out information that other people do not want you to have is inherently difficult.
However, some intelligence failures are not so inevitable. Intelligence failures can come about when analysts (consciously or not) want to come up with answers that they think those above them want to hear. Intelligence failures also come about when different intelligence agencies fail to share information that is important. Both of these types of failures are understandable because intelligence analysts and agencies are human beings who naturally want to protect their own organizations and their own career chances, but they are problematic nonetheless.
Intelligence gathering and analysis is a difficult business and we should not be surprised when intelligence failures occur.