For one, I think many have moral problems with Chamberlain's actions. It was already clear to the world how Jews were treated in Hitler's Germany, for one thing; and at Munich, the Czechs were barely consulted as to the future of their nation. And there are criticisms of Chamberlain's naivete when dealing with Hitler; there's some debate about what Chamberlain's personal impression of Hitler really was (i.e. whether he believed Hitler really wanted peace or whether he was a brutal man who could nonetheless be brought to see reason), but it's hard not to conclude that Chamberlain failed to understand how aggressive Hitler was and how audacious his lies could be.

Chamberlain can be at least partially forgiven, I think, for not grasping Hitler's nature; we have the benefit of hindsight, after all. And I think the moral failings of the Munich talks are a secondary point. The fact is, they were a resounding failure in military terms, which in turn translates to failure in the overarching diplomatic goal of maintaining the peace.

The Czechs had thirty-five well-trained, well-armed divisions, and had heavily fortified their borders with Germany. German rearmament, meanwhile, was not yet complete, nor was its construction of the "West Wall" on the border with France. In particular, despite English and French fears of massive German bombing, the Luftwaffe was mostly concentrated in the east, and in any case Germany didn't yet have bases that'd enable them to provide sufficient fighter escorts for bombing raids against London and Paris. The German generals were deeply uncertain that they would even be able to break through the Czech defenses, and Hitler himself was later to remark, having inspected them since Munich, that Germany would've been in a very dangerous position had war broken out. And on the western front, Germany had twelve divisions, seven of which were reserve, facing the entire French Army of over 100 divisions. In short, if war had broken out on October 1, 1938, Germany would most likely have been unable to break into Czechoslovakia, and would certainly have been unable to stop the French in the west. Even without any British troops on the continent, this would've been an impossible military situation. And going to war would've saved French diplomatic credibility: French security since WWI had been based on a series of alliances with Eastern European nations to keep Germany encircled, but France hadn't lifted a finger for its most important eastern ally, so why should nations like Poland or Hungary uphold those pacts? Clearly the better option was to make a deal with the ascendant Germany (something which influenced Soviet considerations, too). In short, going to war would've produced quick victory due to the balance of power, but surrendering the Sudetenland did an immense amount to tip the scales, as it neutralized France's entire security arrangement and gave Germany more time to rearm.

But for Chamberlain this was essentially the worst-case scenario, being unable to foresee that Germany would go back on its word within months and continue its aggressive moves no matter what happened. That hardly seemed like a likely scenario in fall 1938, unless perhaps you were one of the few who had read Mein Kampf and taken it seriously. Chamberlain wasn't thinking in terms of preserving a military balance of power that favored the UK and France, he was thinking in terms of preserving a diplomatic peace. Under the former outlook, giving Hitler the Sudetenland is unacceptable, but under the latter it's an acceptable sacrifice if it keeps the peace.

Finally, I should note that I don't buy the implication that Chamberlain had to try to appease Hitler in order to show the people that it couldn't be done. Don't get me wrong, war over Czechoslovakia might well have been extremely difficult to sell politically, but there's every indication that Chamberlain was earnestly trying to prevent war at Munich and thought it could be done, rather than essentially going through the motions in order to show that Hitler couldn't be reasoned with, as a means of ensuring his country understood that Germany had to be stopped through force.

I'd say the Chamberlain premiership generally lacked a fully cohesive imperial and foreign strategy. If a ship has no destination, every wind is an ill wind. The British Empire had been financially depleted by the First World War, and the most valuable colonies bar India had become effectively independent, replaced by League of Nations mandates that were expensive to administer and provided little economic payback. Because of its immense debts and obligations, the Empire was forced to both reduce its military and to disperse it across the globe. Historian Paul Kennedy correctly called the challenges facing the Empire at this time "insoluble".

Broadly speaking, the key territories of the Empire were the home nations, the Mediterranean territories, and the far east. It faced a serious enemy in all three territories, respectively, Germany, Italy, and Japan. Japan had become an increasingly probable enemy following the American imposed dissolution of the Anglo-British alliance.

The British calculated that if a war in Europe took place, Japan was likely to take advantage and declare war if the British shifted resources back to Europe. Thus, a war in Europe was not considered to be an option.

Chamberlain came to power well after appeasement had begun. The Japanese invasion of Manchuria, the Italian invasion of Ethiopia, and the German invasion of the Rhineland had all taken place without serious British reaction. According to Colville, Chamberlain took the view that a future war was likely, but that Britain needed time to rearm (and that rearming might prevent a war). As such, Chamberlain did everything within his power to delay a war while Britain armed.

In retrospect, I believe that Chamberlain had few cards to play. Retrospective diminutions of the German military ignore the fact that in 1937 the Luftwaffe was superior to the combined Franco-British air forces, and that in 1940 the Luftwaffe's supremacy secured German victory in the Battle of France. Furthermore Chamberlain himself was not a military commander, and was reliant upon the advice given to him by his general staff.

What Chamberlain really needed to do was examine the underlying assumptions that held the empire together. Interwar British Imperialism was reliant upon circular logic that failed to translate to real-world strength or economic success.