Part of it according to Robert Massie's book Nicholas and Alexandra has to do with the fact that his father Alexander III died at a relatively young age and was not really preparing his son for the responsibilities. He had the tutoring, but didn't get the sit-ins and was basically allowed to enjoy life. This caused his father to believe he was immature and not ready for a position to make decisions....a viscous circle.
However, Russian society was in turmoil for years before Nicholas II came to power. Most believed a showdown was coming, a competent ruler may have been able to minimize it, Nicholas II was too raw to handle it and too easily influenced by advisers.
Partially.
Nicholas II was a die-hard autocrat: he viewed himself as having a God-given right to rule over Russia, and was deeply reluctant to divest this power to others. Even after Russia adopted a constitutional system and an elected parliament (the State Duma) following the Revolution of 1905, Nicholas II adhered to the old conception of the tsar as a total autocrat. He viewed the constitution and the Duma as gifts he had given to Russia; gifts which he was at perfect liberty to take away if he saw fit. He distrusted the elected delegates of the Duma, and even reform-minded ministers in his own government, whom he saw as attempting to undermine his own power. This distrust was mirrored by Duma deputes, who saw autocracy as something which blocked Russian progress and development. Importantly, the Fundamental Laws of 1906 contained a number of loopholes and ambiguously-worded passages which made the exact location of power in the Russian system difficult to discern - the tsar could read the document as ultimately endorsing his continued personal rule, while members of the Duma could read it as implying power ought to lie with them or the government. The tsar's own intransigent adherence to the old system of autocracy meant that the constitutional system in place from 1906 failed to work - and, by the time of the February Revolution in 1917, leading figures in the government, the Duma, and the army had little faith in his abilities to solve the deepening crisis.
Nicholas also bought into the image of the tsar as a 'little father' to his own people. He believed that he had a special connection with the masses, knowing what their true needs were. This view was reinforced, to a degree, by the jubilant celebrations of the Romanov tricentenary in 1913. In Nicholas' eyes, then, members of the State Duma and the government were not truly representative of the Russian people, and so their views could be ignored. Increasingly, Nicholas surrounded himself with other like-minded persons and yes-men, who only reinforced his own beliefs. He held an oversimplistic view of the Russian people and the Russian state which, over time, became more and more detached from the increasingly complex (and troubling) reality.
However, challenges to the tsarist system emerged well before Nicholas II's rule. Problems can be seen as really taking root during the reign of Nicholas I (1825 - 1855). Nicholas I was a military minded man, who valued discipline and order over all else. He suppressed dissenting public voices (especially after the European revolutions of 1848) and did little to address the plethora of problems Russia faced during this period. It was during this period that educated society, both liberal and conservative, emerged as a force of opposition to the Imperial government His reign ended in the Crimean War, in which Russia faced a humiliating defeat at the hand of the British and French. This defeat underscored the desperate need for reform.
His successor, Alexander II (1855 - 1881) was famous for his reform program: his reign saw the emancipation of the serfs, military reform, judicial reform, and reform of local government. However, public opinion on these matters was lightyears ahead of that of the Imperial government and the tsar: reforms, particularly emancipation, ended up as compromises which pleased few and disappointed many. Emancipation also left many former serfs in debt - little was done to actually improve conditions in the countryside. It was during Alexander II's reign that a revolutionary underground emerged: terrorist groups sprang up across the country, and many educated Russians 'went to the country' in an attempt to incite peasant rebellion and revolt (though they met with little success). There was a hope that Alexander II would institute some form of constitutional reform, giving Russia an elected Duma, but this did not materialise before Alexander was assassinated in 1881.
His son, Alexander III was far more conservative - under his rule, freedom of speech was clamped down on, a process of extensive Russification was enacted (which served to alienate Russia's numerous ethnic and religious minorities), and anti-semitism became more prevalent. Despite this conservatism, Alexander III continued with economic reform and pursued a policy of rapid industrialisation in order to help Russia catch up with the industrial developments of the rest of Europe. This programme of industrialisation came with its own problems. Cities grew rapidly as men from the villages came to work in newly established factories. Conditions were poor, and dissatisfaction fuelled the growth of a workers' movement. Even though industrialisation made significant changes to the Russian economy, the country remained under-developed.
By the time Nicholas came to the throne in 1891, he was faced with: an increasingly reform-minded educated public who desired some form of constitutional system, with elected representation; a growing workers movement; a revolutionary underground with a strong tradition of violence; an indebted, and increasingly rebellious peasantry, reliant on outdated farming methods and technology; a very significant proportion of ethnic groups alienated by campaigns of Russification; and a state that was economically, institutionally, and infrastructurally underdeveloped.
His personality certainly did not help the Romanov dynasty overcome the problems they faced at the end of the nineteenth and the beginning of the twentieth centuries, and did exacerbate issues to an extent. However, the extent of the problems Nicholas II faces was truly vast: many issues had been brewing for decades. It is questionable the extent to which any tsar, competent or not, could have ensured the survival of the Romanov dynasty in the end, especially after the onset of the First World War.
Sources:
Richard Wortman, Scenarios of Power, Volume 2
Geoffrey Hosking, The Russian Constitutional Experiment
Wayne Dowler, Russia 1913
It didn't help, but the Czar system was pretty senile by then. And the humiliating loss of the war with Japan was another factor. In short, his personality was a very minor aspect