While watching a WW2 documentary about Midway, it was noted that the torpedoes utilized by American torpedo bombers were extremely unreliable (9 out of 10 would fail to detonate). Is there a specific reason why the US Navy would be ok with this? Or was our torpedo technology simply that outdated?

I addressed this briefly in the consolidated Midway thread.

As I mention there, at Midway itself it's really hard to verify if the torpedoes or the pilots were responsible, since the slaughter of the TBDs was so thorough that pilots weren't exactly left around to track their drops. But the overall conclusion of torpedoes doing no damage there is correct, along with the disaster that was the US Navy's torpedo development program up until 1943.

Essentially, the problem broke down to really bad development and worse testing due to budgetary constraints in the 1930s at the Bureau of Ordinance, then was followed up by command not initially listening to feedback from the field through parts of 1942.

One of the side effects of this was that there were epidemic levels of relief of submarine commanders during the early part of the war - IIRC it was something like 75% - and while some of it was that the submarine service had looked for the wrong characteristics in its commanders in peacetime, it became clear later that some of it had to do with firing torpedoes that just wouldn't go off unless they were at a particular angle.

A great story from this era is when the legendary commander of SubRon 2, Swede Momsen, got word from his captains that it wasn't them but the torpedoes that were the problem, he put his life on the line to find out since his word carried weight with the brass - he basically had pioneered deep sea diving and conducted the first successful sub rescue in history, and after the war he was largely responsible for the design of the first nuclear submarine.

So Momsen took his sub out to Kahoolawe, fired a few torpedoes off, and then dove into the water to personally recover the one that hadn't exploded and eventually figured out with a live dud torpedo on board that there was something wrong with one of the pins. His own boss, Admiral Lockwood, wasn't exactly thrilled with one of his best commanders on his plan's implementation, but this did successfully break the logjam and ended up catching command's attention - Nimitz was a former submariner and his own submariner son had reported similar issues, and once it got up to King it became one of his top priorities. The latter spent a good part of late 1942 and early 1943 browbeating BuOrd until they came up with solutions late that year.

Blair's Silent Victory covers this and the rest of the submarine war in great detail, and while Peter Maas' terrific biography of Momsen, The Terrible Hours, focuses more on his development of the diving program and the rescue of the Squalus, the torpedo blunders are also well documented in that.