Interesting thread. Before figuring out a mistake that lead to a problem, it is usually good to talk about the problem. If I were to take a stab at the problem with Nikon, they act like a company without much vision and/or working capital to implement that vision. A vision that really differentiated their product line so that they could grow from their base. If anything, I see Nikon barely keeping their base happy. As for vision to grow, both Sony's and Canon's are pretty evident, Sony growing into a new market (MILC), Canon holding the base but diving into that new market with, arguably, as good or better products after that market has matured a bit. But Nikon, they have done some amazing things like the 500 PF, 14-24, some great camera bodies, but, to me, they act like a company that either does not know where they want to go or do not have the working capital to get there. Specific items are great, but look at their mirrorless lens lineup? Canon has given us an "L" level holy trinity of zooms, Nikon? Then the Z mount cameras, a friend has one and loves it, but my general impression is that it lags behind Sony and, now, Canon.
So, my thought as to the mistake, it probably happened over time, but a number of decisions that hurt their profitability diminished their working capital and led to a lack of investment. One blatant example of this, buying sensors from Sony very likely reduced the profitability of their camera line.
Sure
I haven't written Nikon off, but a D860/D510 would actually be an example of what I consider to be the problem. They are playing to their existing base instead of doing things to expand their base. Give me a Z7 II that is as good as the R5 (for stills) plus a number of great new Z mount lenses and then they are in the MILC game. Or, even give me a DSLR and lenses that make me think I do not need mirrorless!
And perhaps this is all their strategy, Camera/lenses are a shrinking market. Maybe Nikon brass have decided to make token releases into MILC, but ride DSLRs out as long as possible. As long as they have an alternate strategy, that would be unfortunate for the camera market, but that could be best for the company. But, their stock is ~40% of 2017 peak, so, investors think something is amiss as well.