Remember that for awhile they weren't fighting to win...just to hold the Yeerks off long enough for the Andalites to arrive. They had no need to be offensive. They wanted to do what had to be done and get back to being ordinary kids.
And that's exactly the strategic error. By around the time of the David fiasco it should be eminently clear that the Andalites aren't in position to save Earth, only contain the infection; that they can and will burn the planet as soon as Z-space reconfigures. They've seen Andalite forces use weapons of mass destruction on Leera, and at least Tobias knows about the biological warfare against the Hork-Bajir. Andalites are fickle allies at best, and really present humanity with two options: survive on their own merits or be destroyed.
That's really the greatest irony of the series: in the end, one species subjugates another. The galaxy takes another step down Crayak's path. Ellimist, for all that he's invested (retemporating Elfangor, sending the Chee to Earth, sending the last Arn, risking appointing the Animoprhs as champions for the Iskroot, giving Tobias the ability to morph, etc.), only wins the victory of allowing the Hork-Bajir another chance.
There is on Earth, and actual country that has this defensive strategy: they train all adult male citizens, they've dug into their mountains, and they avoid becoming entangled in foreign affairs. Still, they are a small country with well developed high-tech manufacturing infrastructure. Should a military power decide they want to invade, they probably could, successfully. So here is there strategy: if invaded, they make the invader pay for each kilometer of mountain, each tiny valley in blood. When forced to retreat, they destroy infrastructure behind them: bridges, dams, factories, power lines. It is possible to take Switzerland at any cost, and there is nothing the Swiss can do to change that fact. But what cost? Hundreds of thousands of casualties to take scorched earth which comes with a complementary insurgency?
That is why Switzerland hasn't fought a war in two hundred years: total defensive warfare. That is why the Nazis never executed Operation Tannenbaum. What would a half million Swiss militia do against an invading army of one million? Take two shots and go home.
By wanting to be ordinary kids, they jeopardized their families and themselves. It was only a matter of time before a clever Yeerk noticed the lack of human casualties, the preference for weekend activities, and put two and two together. They could have disappeared from their lives without raising Yeerk suspicion--it would have been painful, yes, but would have protected their families much better than their shaky attempts at secrecy.
Personally, I blame pacifist education. When faced with a situation calling for violent action, they perform admirably, but never even realize how much they don't know. They found themselves a guerrilla resistance, but never take the time to learn from the guerrilla leaders of the past. They cling to tight to normalcy, but in that way nearly lose everything.
