Another piece of evidence for this position appears to be the departure of Admiral Fallon. Fallon was the head of CENTCOM, the US unified military command in charge of the middle east. He was brought in at the same time as Robert Gates and David Petaeus, and was considered part of the injection of competence into the administration. Initially, it looked as if Fallon had left over the issue of Iran, but it has become clear that he actually was disaffected over the Administration's policy toward Iraq.
Kevin Drum thinks this is a case of a regional commander exceeding his prerogative and making policy. I heard Zbigniew Brzezinski making much the same case on On Point. This is more-or-less correct, as far as it goes, which is not very far. In principle, it's not illegitimate for Bush to remove his CENTCOM commander, but it is a sign of this administration strategic failure.
Bush claims that he generally does what his commanders tell him. This is a specious claim, in fact his policy had been the same toward the Pentagon as it has been toward every other existing bureaucracy the administration has encountered: to bully it and beat it into submission.
The resignation of a CINC is a big deal, under almost any circumstance. But considering the Bush Administration's seven-year effort to put the Pentagon under its thumb, the resignation of a commander like Fallon, who by most accounts was willing to exercise his independent military judgment, is another setback for the professional officer corps as an institution.
Make no mistake. None of the Bush Administration's efforts in this regard has been about re-asserting civilian control over the military in some constitutional sense. The effort has been focused on degrading the autonomy, independence, and institutional authority of the Pentagon in order to further the narrow ideological and partisan aims of this particular White House.
The commanders have largely rolled over to Bush. This is in stark contrast to the nineties, where, as Matt Yglesias pointed out, Colin Powell became a media star by constantly battling civilian leadership. With the current administration, the military has mainly enabled rather than obstructed.
Bush is willing to hide behind military commanders, but his claim that he does what his commanders tell him simply isn't true. He does what Petraeus tells him because keeping the war going happens to be what he wants to do anyway. I suspect John McCain will be the same way.
As the commander of CENTCOM, Fallon has a greater perspective than Petraeus (and evidently, our president). While Petraeus has seen some improvement in the smaller picture, Fallon sees what a disaster the effort is and will continue to be.