Freyberg was overly cautious.
There's speculation that he (according to Freyberg's son) was given verbal instructions to not act completely in accordance with intelligence. I doubt this because after being expelled from Greece and the course of the war so far a victory over the Germans in Crete would have made for great propaganda and a morale boost. From post war released 'ultra messages' it seems they Brits knew all about the invasion of Crete.
Check this thread
Ultra Messages Sent to Crete Before the Battle Some of the problems the Germans ran into had to do with some paras being dropped too high or getting scattered. For instance, Fallshirm-Jäger-Regiment 3 ended up widely scattered to form effective battle groups and were nearly all killed before they reached the ground.
They had dropped in an area of the countryside containing as many as 15,000 men of the 10th New Zealand Brigade.
Also the Germans lacked suitable transports. After the initial waves of gliders and paras the intention was to re-enforce them with seaborne troops. These mostly consisted of commandeered vessels called 'caiques' (fishing boats dependent on a sail and a small auxiliary engine).
As plans were adapted to the new situation these re-enforcements were delayed and had a best speed of 7 knots. This gave the Royal Navy time to hunt these boats down and sink many, the rest were re-called.
But whatever losses the Germans suffered it was worth it for the to take Crete.
For the Germans, the island of Crete would provide forward base to conduct offensive air and naval operations and to support the ground offensive in Egypt.
Taking Crete would deny the Allies airfields closer to the Ploesti oil fields in Romania.
The Germans averted a real 'disaster' only because of the poor command and show of the commonwealth forces defending Crete. They made one critical mistake after another.
