WWE's worst mistake is not doing more about substance abuse and concussions until fairly recently. The current safeguards and processes still leave a lot to be desired, but there have been positive reforms; and had they been made 10-15 years earlier, various lives might have been saved.
In terms of creative dropping the ball (which I suspect is what the original poster had in mind) the worst fumble was probably the invasion/alliance angle of 2001. Not the worst angle they've ever done, but certainly the most disappointing relative to its potential. The creative and financial opportunities at their disposal following the acquisition of WCW were immense.
Other wasted angles – not quite so bad but certainly fresher in the memory – include Nexus, Summer of Punk and the Wyatt Family. The Punk one in particular really got to me. That could have been a real sea change moment in the company (one towards it providing a much smarter and more postmodern form of entertainment) but somehow it ended up being about Nash and Triple H. That was probably the point where I gave up on WWE, or at least formed the opinion that Vince needs to die before it will get good again.
I know most people are over it now, but Brock breaking the streak still bothers me. Never should have happened.