German armor production was kneecapped by the key factor of any sort of mass production; availability of resources. Shortages of cobalt, copper, aluminum, and most importantly, oil and later on manpower prevented German industry from producing tanks on the scale the United States, the British Empire and the Soviet Union, which had the combined resources of almost half the planet at their disposal.

When looking at German tank production, you can think of it in terms of generations with large changes differentiating each iteration of tank design and production, and molded to the situation that Germany found itself in and the type of war it wanted or ended up finding itself fighting.

What could be seen as the first generation of German tanks are your Panzer I and II, built more for speed to spearhead and exploit breakthroughs in areas where there was little opposition against them. the Panzer I and II weren't by any means superior in terms of firepower or armor, but did have the advantage of communication, with every tank having a radio installed at the insistence of General Heinz Guderian. With every tank crew able to talk to each other, coordination between a division of Panzer II's could outflank and overpower almost anything they came across during early WWII, such as the Polish 7TP's or British cruiser tanks.

The second generation of German tanks was marked by vehicles mounting much more powerful guns and increased armor, but still maintaining good speeds to break through frontlines and exploit those breakthroughs. The Panzer III, IV, and the StuG III fit here and probably fit the bill most for your "O.K." tank as you describe, comparable to the Soviet T-34 and M4 Sherman in terms of general armor and firepower.

The III and IV would eventually go on to be the backbone of almost all German Panzer divisions, and were extremely good vehicles for the war that Germany WANTED to fight, which was quick, fast wars that relied on speed and maneuverability to outflank and destroy their enemies. After the failure of Operation Barbarossa however, Germany found itself in a completely different kind of fight, a war of attrition. Germany could make a good number of Panzer IV's sure, a respectable ~8,500 throughout the war, but when your enemy can make 35,000+ comparable T-34 tanks, Germany's resources shortages are ultimately going to lose the war for them as these tanks cannot be replaced as easily as those from their resource-rich enemies.

Germany's solution to this war of attrition takes the form of the third generation of tanks, the big cats we all know in the Tiger, Panther, and Tiger II. The idea was to do more with less, so to speak. Germany simply doesn't have enough resources and material to produce 30,000 Panzer IV's; Germany would run out of steel, oil, and trained crewmen before they even get close to that number, so instead make the Tiger I which could be made in still fewer numbers, but perform better on the battlefield than 10 Panzer IV's could, while still being fast enough to break through tougher frontlines and exploit the breakthrough.

While the big kitties were fearsome opponents on the battlefield and overall had the 1-to-1 advantage over their allied peers, their numbers produced were too small in comparison to the US and USSR. And resource shortages within Germany plagued the production of these tanks even further, most notoriously with the final drive of the Panther tank, which is made of cruder metals than what was required, and usually caused the drives to fail after only 150 kilometers of driving on its own power. Also, with the Tiger II starting production so late in the war, most factories capable of producing them have been damaged or destroyed by bombing, with not even 500 of them able to be produced by the end of the war.

The final lesson here is Germany went for quality over quantity in their tanks because there was no competing with the US and USSR in a war of attrition where quantity will always win out. With what little resources the Germans had, they opted to shift gears and make what few vehicles they could produce the best war machines they could possibly be. But with shortages of oil becoming more and more dire, factories that can even produce these big cats being bombed into oblivion, and a good many of these machines just dying to mechanical failure because of overengineering or inferior metals being used in the machining, one could make the counterargument that these behemoths were more trouble than they were worth and they would've been better sticking to the Panzer IV as their ride-or-die tank.

For further reading, check out this awesome summary of the flaws of the Panther tanks by Maj. John H. Womak. Also check out this journal article, No Room for Miracles. German Industrial Output in World War II Reassessed by J. Adam Tooze