They bit off more than they could chew. Nazi Germany had about 80 million people. The UK had about 60 million. The USA had about 140 million. The USSR had......... can't remember but it was well over 100 million too. Throw in smaller countries like Australia with 7 million, Canada with 10 million, etc and you suddenly find Nazi Germany quite outnumbered.

So they were outnumbered. Anything else? Yes. They were not only outnumbered in just population but also in manufactured goods. At some point during the war the US was producing about 50% of the total value of goods of everyone involved in the war. The US's factories and transport routes weren't being bombed and strafed like the German's were. Even if the Allied bombing campaign didn't crush German production it did make it hard to move goods with transport infrastructure being destroyed. So, not only did the Allies have more people but they also had more stuff to fight with and could more easily replace their own losses, in both people and equipment.

But it wasn't just the Germans on the Axis side. There was also the Italians and Japanese (and some other countries but we won't look at them all).

Well, the Pacific War was mostly a naval war and that wasn't needed so much against the European Axis nations. The US had a lot more naval power than the Japanese (during the war the Japanese would have, for instance, 17 aircraft carriers of all types compared to around 130 for the US of all types) and this enabled the US and Allies to cut off Japanese islands from supply and only land on the ones that the Allies needed for bases. This meant a lot of Japanese troops ended up sitting on their island twiddling their thumbs with nothing to do for a lot of the war, you know, except starve to death.

So you still have the Italians. Well, a lot of people see them as more of a drain on the German war effort than a help. They "forced" the Germans into a war in North Africa. Forced them into a war in Greece. This diverted German soldiers and equipment from the war against the USSR. Not to mention that cooperation between the Axis nations was pretty bad especially when compared against the cooperation between the Allied nations.

So technology. This varied a lot during the war and then you can argue until you're blue in the face about whether a Panther or T-34 is better. Needless to say, even if the Panthers were better the Allies were able to build a lot more of their tanks. And a lot more planes. Etc, etc, etc. Having better isn't always better when the other side has more.

Tactics. Well, here the Germans could be said to be the best. What let them down was having a Cpl (Hitler) in charge of the entire thing and a lot of his Generals, etc being too scared to contradict him. Strategically, while the Germans at times were brilliant with that too, the Germans were let down when Hitler interfered with what he thought was best. However, strategy and logistics (supply) wins wars and no matter how good your soldiers are at actual fighting (tactics), if you make bad strategic decisions and can't supply them then you'll most likely lose.

So why did the Germans lose the war? Take your pick.

There are quite a few threads in the FAQs section that pertain directly to this question. Here are some:

At what point did it become impossible for Hitler to win the war: http://www.reddit.com/r/AskHistorians/comments/xuu8i/at_what_point_did_it_become_impossible_for_hitler/

Was it even a possibility the Axis could have won WW2: http://www.reddit.com/r/AskHistorians/comments/v0wc6/was_it_even_a_possibility_the_axis_could_have_won/

Was Hitler actually very close to winning the war, as goes the conventional wisdom: http://www.reddit.com/r/AskHistorians/comments/sku7u/world_war_ii_was_hitler_actually_very_close_to/

These threads definitely get at your question, and have some very thoughtful answers. They are absolutely worth a read.