I'm curious as to where you heard that.

In the 1973 Yom Kippur War, the first thing we should talk about is the lineup of forces. On the Suez front (remember, Israel was occupying the Sinai up to the Suez Canal at the time), Israel had 10 infantry platoons, 12 artillery batteries (52 cannons), 290 tanks, two ground-to-air missiles (Hawks), and six anti-aircraft batteries. 450 troops, deployed in 16 strongholds and 4 observation points, opposing 19 infantry brigades, 8 mechanized brigades, ten armoured brigades, three airborne brigades, an amphibious brigade, and an R-17E SSM brigade, as well as 1,700 tanks, 2,000 armoured vehicles, 2,500 artillery pieces, 1,500 anti-tank guns, 700 anti-tank guided weapons, several thousand RPG-7 projectiles, and more than a thousand RPG-43 anti-tank grenades, on the Egyptian front. These numbers come from Israel's Wars: 1947-93 by Ahron Bregman, for reference.

The reality is that this was not because of pouring money into one thing or another alone. The Southern Command was so poorly manned because this line (the Bar Lev Line), had been led by Ariel Sharon of OC Southern Command until a few weeks before the war, and he was not a believer in the Bar Lev line. He preferred flexibility in fighting, and mobility, and failed to get his superiors to agree (he was most likely right on this point, after all). Instead, he simply didn't use all the strongholds, and they fell quickly anyways since the ones that were manned were too far apart to support each other, and Egyptian forces could pour through the gaps.

On the Syrian front, the Syrians had 3 infantry divisions and a strength of 45,000 men, each division having two infantry brigades, a tank brigade, and a mechanized brigade. They had 540 tanks in the front line and another 460 in reserve just behind the first line, and they had the Syrian Republican Guard, a brigade in strength which was equipped with T-62 tanks and whose mission was to protect the regime in Damascus, and two armoured brigades and some 200 static tanks in the line, making a total of approximately 1,500 Syrian tanks ready for battle; this formidable force was supported by 942 pieces of artillery.

The Israelis on this front had 10 infantry platoons, 178 tanks, and 11 artillery batteries with a total of 44 pieces.

Again, lifted from Bregman.

The reality is, Israel did not prepare properly for the fight and thus suffered those huge setbacks as a result. But it's also hard to prepare as such when Israel's population is so much smaller: as demonstrated in the lead-up to the Six Day War, a mobilization of the Israeli reserves to match the size of the Arab state armies would effectively grind the Israeli economy to a halt, and could not be maintained indefinitely. Israel's experience with this in the Six Day War is why they developed such lightning-quick plans and attacked in one fell swoop with the pre-emptive (disputed by some) strike on Egypt first.

The real place that Israel had poured its budget was the air force. Its prestige for winning the '67 war had not only created a sense of superiority in Israel (which was why Israel, despite taking fewer losses and having strategic victories in the '73 war, felt it had lost), but had proven its worth. However, Syrian and Egyptian anti-air, supplied by the Russians, was very effective and shot down many, many Israeli planes, leading to a curtailing of the Israeli Air Force's (IAF) capability.

As Morris writes:

The Israeli commanders, repressing memories of the SAM-aircraft confrontations of July 1970, did not believe that the Arabs' antiaircraft networks provided an adequate defensive umbrella. In April-May 1973 they held that the IAF could destroy the Syrian air force "in two hours" and that if the Egyptians launched a cross-Canal offensive, IDF armor could wipe them up and the IAF could demolish their air and anti- aircraft forces in "a day or two," with the IDF itself crossing the Canal on day 2 or day 3.

Also, because of a poorly planned counteroperation against the Syrians when focus shifted back to the Golan from the Sinai for the IAF, what should have been a pre-emptive strike was treated as a counteroffensive one by David Elazar, and the strike on Syria was launched. However, instead of launching the whole IAF on the strike, some were diverted elsewhere for ground or Sinai support. It obviously went poorly, but improved over time: as the pilots learned to cope with SAM 2s and 3s, and as the Syrians ran out of SAM 6s by the second week, the IAF had an easier job ahead of it. And when the Egyptians advanced around October 13, out of the cover of their air defenses, that was a huge factor in sealing the fate of the Egyptian front.