There were several reasons why the German paratroopers took heavy casualties on Crete. These combined failures of German doctrine and planning with Allied successes.

The primary reason why the German paratroopers suffered heavy casualties was the inadequacy of German parachute doctrine. The German doctrine focused on low altitude drops. This decreased the risk to the paratroopers from ground fire. However, the troops could not carry their rifles with them, and they were instead dropped in canisters, along with the unit's heavy weapons. Until the weapons were retrieved, the parachutists were armed with pistols, knives and grenades alone. If the troops were dropped into an area clear of Allied troops, then this was only a slight disadvantage. However, on Crete, this occurrence was rare. German drop-zones frequently coincided with Allied positions, and were often threatened by counterattacks. The German parachute had a single riser, attached to the back - this removed the parachutist's control of the descent, preventing them moving towards a canister while in the air. This meant that troops armed solely with pistols were facing well armed and equipped troops. In the area around Maleme, German weapons containers were captured by the New Zealand troops present, further increasing the disadvantage.

A second reason, and one that compounded the first, was the failure of German aerial reconnaissance to determine Allied positions. The ANZAC troops had dug in well-camouflaged positions around Maleme and Rethymno - at the latter, only a single ANZAC position was sighted in the days leading up to the attack, and the location of the position would be changed as a result. Similarly, 14th Infantry Brigade had dug in well around Heraklion, and had further obfuscated its position by preventing its troops and AA guns firing on German aircraft. These meant that German bombing raids hit the wrong targets, reducing Allied casualties and morale losses. It also meant that the drop zones chosen for the paratroopers were easily taken under fire from the Allied positions. The 3rd Battalion, Sturm Regiment, dropping south of Maleme, landed in an area defended by the 23rd and 21st New Zealand Battalions. Similarly, 2nd Battalion, 3rd Parachute Regiment, landed on the 18th and 19th NZ Battalion. The paratroopers were easy targets during their descent - the commander of 23rd NZ shot five from his HQ, while his adjutant reportedly shot two without even standing up from his desk. At Heraklion, where the British AA guns had survived the preparatory air raids, the German troop carriers were easy targets. Over Heraklion, fifteen Ju-52s were shot down in a two hour period. The surviving troops mainly came down in and around the positions of the Black Watch, where they were easily crushed. This action, combined with the fighting around Rethymno resulted in the near destruction of the 2nd Parachute Regiment. On the 21st May, German reinforcements were dropped onto the positions of the 28th (Maori) Battalion, losing nearly 2/3rds of their force.

Adding to German discomfort on the initial drops was that Cretan terrain was poor for a parachute assault. It was mostly rocky, wooded hills. Towards the sea, it flattened and cleared, but remained rocky. These had several disadvantages for parachutists. Landing on rocks brought a high risk of injury, with many spraining ankles or breaking bones. Trees and telephone poles snagged parachutes. With the German parachute design, it was difficult for a parachutist so trapped to free himself, and they became easy targets. Those landing on the clear terrain around the coast were freed from this risk. However, they suffered heavy casualties, due to a lack of cover. In some cases, the terrain itself could be deadly. Around Rethymno, several aircraft, put off by heavy AA fire, dropped their troops over the sea. These troops, weighted down by both their equipment and their parachutes, soon drowned. According to Beevor, about a dozen parachutists landed in a cane-break, where they would be impaled on bamboos.

On the Allied side, several well-conducted counterattacks prevented the German parachutists from organising and consolidating their positions, as well as causing heavy positions. At Rethymno, a strong German force was dropped around an olive oil factory at Stavromenos, a few miles down the coast. From there, they moved to capture Hill A, which threatened the ANZAC position around Rethymno Airfield. The local commander, Lt Colonel Ian Campbell, launched an immediate counterattack, checking the German advance. The next morning, having scrounged up as many reinforcements and stragglers as possible, he launched a full-scale counterattack on Hill A. This routed the German paratroopers, who withdrew to the olive oil factory, where they dug in. To the west, 2/11th ANZAC, under Major Ray Sandover, launched a simultaneous counterattack against German paratroopers that had landed between their positions and the coast. This captured 88 Germans, as well as the commander of the 2nd Parachute Regiment, Colonel Sturm. Along with him, the German operational orders were captured, a vital source of intelligence. At Heraklion, the 2nd Leicesters carried out aggressive patrolling to winkle out any paras that fell into their area of operation. Brigadier Chappel, commanding 14th Infantry Bde, launched an immediate counterattack, supported by the light tanks of 3rd Hussars and two Matildas of the Royal Tank Regiment. According to the the 3rd Hussars's commander in the action, his tank commanders claimed at least 30 paratroopers with their revolvers alone. Chappel's rapid reaction all but wiped out 2nd Battalion 1st Parachute Regiment. However, around Maleme, no such counterattack was carried out, allowing the Germans to consolidate and enlarge their foothold on the airfield.

Finally, one should not neglect the actions of the local populace. Once the attack began, the Cretans armed themselves with a wide mix of weapons to defend their hometowns. These ranged from their knives, through sporting guns, to captured rifles and SMGs. At Alikianou near Canea, roughly 100 civilians, including women and children, fought to protect their village. To the south and west of Heraklion, Cretan civilians went after paratroopers caught in the trees - many had their throats cut. They also harassed German attempts to organise their positions. Once the Germans began their assault on Heraklion, through the Canea gate, civilians and the Cretan gendarmerie formed a significant part of the defence. While this didn't hold for long, the German advance through the city was harassed by Cretan guerillas.

Sources:

Crete: The Battle and the Resistance, Antony Beevor, Penguin, 1992

The Lost Battle: Crete 1941, Callum MacDonald, Pan, 2002