As most have stated previously, war came too soon for the Kriegsmarine, and she was not prepared to fight a war against England 1 to 1, much less the United States. Hitler believed (as the Vietnamese did in the 1960s, and world terrorists do today) that they do not have to win the military war against the US, they simply have to win the war of public opinion. Hitler felt that if he started knocking on the door if the USA (Operation Paukenschlag), sinking US ships and killing US merchant sailors, that the public opinion would force the US to terms, or at least adopt a more neutral stance. Obviously, that didn't happen, and the overwhelming shipbuilding capacity of the US simply buried that of the German submarine arm.
Germany's surface fleet was also at a disadvantage because of Allied airpower. England was at the extreme west of the theatre, so her navy could operate without the constant fear of heavy raids on places like Scapa Flow. On the other hand, in Germany, the North Sea, and Biscay, Allied airpower had the ability to seek out and destroy the Kreigsmarine surface units while they were still in harbor... German heavy units also had to run the gauntlet of either the North Sea passage, or the Channel, to get back to home waters. In essence, they were boxed in from the start.
Her aircraft carrier production was limited to Graf Zeppelin, and even she was not of the same quality of her contemporaries, the US Yorktown Class, the Japanese Shokaku, or the British Illustrious Class. Again, when you consider the overall situation, any large surface unit capable of mounting a threat, especially an aerial one, would have been a high priority target. Graf Zeppelin wouldn't have lived long were she operational.
As for the U-boats...well, it wasn't any one solitary thing that caused their downfall, it was a combination of things...
Type VII boats were outclassed and outdated by 1942...they were not designed as long range boats, period. The Allies had radar, to pick them up on the surface, and sonar, to sink them. We captured and Enigma machine from U-110 early on, so we knew where and when they were deployed. Lastly, Doenitz refused to believe that the code could be broken, and with his strangle-hold methodology of command and control, continued to radio instructions and daily reports to his operational boats, so their locations, destinations, and objectives were clearly laid out to the Allies. Even when the 4th rotor was added, and the U-boats enjoyed a reprieve, Bletchley Park built the Bombe and Colossus, and were reading German codes again within months.
Again, war came too soon for the U-boat arm as well...when the war started, Hitler felt that it would, and could, be won with the weapons in the arsenal at the time...the Bf-109, Panzer IV, Type VII and Type IX U-boats. All of these systems were outclassed by 1942, but labored on until 1945. Development and production of superior systems, such as the Fw-190D-9, Ta-152, Panther, Tiger and King Tiger, and the Type XXI and XXIII U-boats should have commenced as early as 1942 and taken precendence over the older systems, but didn't. As a result, they were too few, too late.
Jeff