Balon Greyjoy was a terrible, terrible King. Aside from his first Rebellion which was a silly idea, his rebellion during the War of the Five Kings was soooooooooooooooooooooooo badly done.
Robb Stark had promised him his crown if he joined ranks with him. A fair deal. He could attack the richer, most vulnerable, and more hated Lannisters and get his crown and everything and be remembered as a great liberator.
[COLOR="MediumTurquoise"]That is a good strategy in the mod where the Starks remain in the north, in the books however the Westerlands still had Lefford's army lurking about and levies were gathering at Lannisport, while the North had most of it's men taken south and were caught up in the fighting. Also the nOrth can be defended easily from Moat Cailin but the Westerlands are hard to defend from all sides.[COLOR]
But the Greyjoys "do not sow" or whatever. They don't have their crown handed to them! They take what is their's! So instead, they go to raid the North in a surprise assault that takes a bunch of cities and is fairly successful. But they can't hold the North. It's far too large and spread out. As soon as Moat Cailin fell, which was inevitable as well because Ramsay Snow was in the North with at least 500 men (I forget the exact number) and could crush them if they were coordinated an attack from the South, but whatever.
Moat Cailin's fall was inevitable not because of Ramsay's great military skill or the valor of his men, but because the Ironborn were alone and nobody gived a damn if they died or not, they were abandoned in the North when Victarion left with his men from Moat Cailin living behind a small army.
Anyway, after this spectacle of tactical brilliance, they turn around to ask the Lannisters for their crown in exchange for helping with the North. To which they get no reply because Tywin Lannister is very intelligent. So what was the point of it all? Instead of getting their crown from the North, they just turned around and asked for it from the South. GENIUS, I say.
Robb was already losing the war. Balon probably thought, like most lords, that Robb will fall before the war was done because he was an ambitious boy still young. Also the offer came up after Balon was starting to see how big the North was and more importantly after the Blackwater. He suddenly had to keep his crown in the face of the Lannisters, the Tyrells and everyone else who supported Joffre's claim. Balon would have sent the offer regardless who got the throne after a time.
Thing is Balon became a big player after taking the North. He came to the negotiating table as a proven leader with half the North captured and the posibility to strike south as well using his fleet. He came to the table as an equal player rather than an ambitious lord with poor small lands and no victory in the war.
He wasn't handed the crown now like Robb would have done at the beginning, he was having it confirmed. It's a difference. It's like getting a medal without doing anything rather than getting a medal for proving yourself. It's the Ironborn pride taking effect.
As if that wasn't bad enough, they have no follow-up plan for what to do later, after they've gotten themselves into the North. They should've sacked all the Northern cities and left after they realized the Lannisters weren't going to give them their crown (and then bent the knee). Instead they decided to just chill in Deepwood Motte, Torrhen's Square, etc. WHY?! What were they hoping to accomplish? Annoying the North until Roose Bolton brought an army to their doorstep?
Balon probably had some plans for the future but he died before he could do anything. Euron had a different plan in mind which didn't involve the North. So he charged south abandoning the troops in the North (which he probably though were loyal to either Asha or Victarion or Aeron and would have been a nuisance to him).
Hell, they left the heir to the Iron Isles and the last son of Balon Greyjoy to his death in Winterfell. What the

were they thinking?! They should've stayed with him or made him come back to someplace safer. Or at last done something other than leave him to die. (Obviously he didn't die but was captured instead, but it was like a 90% chance he was going to die.
Theon was commanded to raid the Stoney Shore, taking Winterfell was his own plan. We don't get to see Balon's opinion on his son's action unfortunately. Then Theon's pride kicked in and didn't want to come back when ASha came to convince him to go back, he didn't want to live in her shadow the rest of the war.The Ironborn were never an honorable people so Asha fled rather than die a heroic death at her brother's side.
On the other hand Balon probably wanted to have Asha his heir and sent her to Deepwood which was safer to hold while still important. In a way he did protect the heir he wanted.
He made so many errors it's just ridiculous. It's little wonder half the people at the Kingsmoot were demanding peace.
I don't think it's about errors as much as how you see things. The Ironborn way was to attack whoever was least protected and raid them. The north and the Reach later. I like how the Ironborn are good sailors and hardy warriors good with an axe (yes, I like axes as much as Shagga) from a harsh land but the raiding and pillaging is only good in war. Rodrik the Reader is probably the most sane Ironborn, because he understood how the Old Way is dead. I'm pretty sure in the end most Ironborn will die and the Old Way with them, while still keeping the hardy warriors alive. Their strategies are based on the Old Way, if you take that out of the equation you would have a good player in the game of Thrones. Look at Euron, he is Ironborn but not a fanatic of the Drowned God, and he's becoming an important figure in teh fate of Westeros.