German airpower failed in WWI for numerous reasons; although /u/wiking85 has point about the blockade and America's entry, the reasons are much more complicated then "the Allies overwhelmed them". While the German Luftstreitkrafte had some of the highest scoring aces of the war, Udet and the Red Baron just to name a few, this obsession with the cult of the "Knights of the Skies" came at the price of poor army-air cooperation. This was highlighted during the Somme Offensive, in which the Franco-British air forces exerted air superiority over the battlefield, reducing their German counterparts to impotence. Ludendorff was scathing in his criticism:
At the epoch-making conference at Cambrai on 8 September Ludendorff argued that 'artillery and flyers must be brought closer together. A combat high in the skies brings them the prospect of high decorations and mentions in dispatches, and has become more attractive and splendid in their eyes than the business of observing for the artillery, which we have not got at all right. An understanding of the high importance of artillery spotting is something which can be awakened only over the course of time.'
Although the Germans would improve aircraft and training before the war's end, they were behind the eight ball. Although a brutal harvest was reaped against the Royal Flying Corps in 'Bloody April' 1917, improved training and aircraft designs allowed the Allied pilots to regain the initiative. With Allied aircraft and pilots capable of matching the Germans qualitatively, the superior numerical strength of the Allied air forces, combined with fuel shortages stemming from the blockade meant that the Allies would steadily attain supremacy in the air. After the last gasp of the German Army in March 1918, which saw the Red Baron himself shot down, defeat was only a matter of time.
Peter Hart has three excellent books on the Air War in WWI, Somme Success, Bloody April and Aces Falling.
Not to be glib, but the blockade and US entry into the war. The Allies were just able to swamp Germany with numbers by 1917 due to US supply and money; still even as late as 1918 the Germans were able to still regain technical superiority and in September were inflicting heavily disproportionate losses, but it was far too late to matter. The blockade halved German economic potential, US supply doubled the British and French.
Check out Hew Strachan's To Arms for the financial details.