I am by no means an absolute expert on the Battle of the Atlantic, but I think it's story has alot in common with the Battle of Britain (which was the basis for my masters thesis in history some years ago). Both battles, campaigns really, have been recounted so often, by some many different authorities, over the years that facts have become intertwined with myths. The principle myth of both, is that the Germans came very close to winning, though they came much closer in the uboat war.
I think Germany lost the Battle of the Atlantic for three broad reasons:
1) Insufficient operational uboats during the time period, 1939-1942, when they had an excellent chance to win.
2) Ultimately losing the technology race. (You touched on this when you mentioned the allied development of CM wave radar.)
3) Closely tied to the above, the Germans were slow to realize the effectiveness of allied HF-DF RDF, and when it was coupled with the breaking of the "Shark" key of the Engima it began the near slaughter of the uboats.
1) Don you are correct that the Uboat arm of the Kriegsmarine did not have a sufficient number of uboats at the start of WWII. Doenitz stated in his memoirs that he wanted at least 100 more operational boats of the Type VII/IX variety. He actually started with 57-58 operational uboats, depending on what sources one believes. In 1940 Germany commissioned 55 uboats. They lost 24 that year, therefore, roughly 80 uboats were operational at any time in 1940. That year, uboats sank 471 ships (Blair claims 520) worth about 2,606,000 BRT. Surface ships and the Luftwaffe sank a further 1,917,000 BRT. The important number here is 60. Why could German industry only produce 60 uboats for commissioning in 1940? The reason, and it had a deliterious effect on the Heer and Luftwaffe also, was that German industry was not fully mobilized for war. In fact it would not become fully mobilized until early 1943. This lack of "full war effort" led to slow production values for armaments of all kinds. This was an "own goal" for the Germans, as it could have been avoided by better management on their part. It is interesting to speculate just how much more effective the uboat arm would have been with an additional 100 operational boats. Making a very conservative estimate, if those 100 uboats had been on hand and each boat sank an average of three ships for 16,600 BRT, then one could add an additional 1,660,000 BRT sank in 1940. Taken together the total BRT for 1940 would then have been 6,183,000; a war winning rate of sinkings. I will address my reason 2 and 3 in another post. Football is almost on!
Ernest