Morey's biggest mistake was not necessarily the Westbrook trade, but trading for Paul and then signing him to a giant extension. The conventional wisdom was that Paul and Harden were a clunky fit together and it would be awkward for them to play together, and it ended up being the case and Paul demanded a trade. Some point during his tenure, Houston decided to give him a huge extension that was kind of shocking at the time, given Paul's injury history and the general aging curve for small guards. So when the Paul/Harden situation predictably went south, the trade market for him was really limited due to the extension. Houston was going to have to take on an equally questionable massive contract, so they pretty much had to trade with OKC and get Westbrook.
What annoyed me about Houston/Morey was that he basically had a crazy-guy scheme for basketball that could generate regular season results, but kept coming up short in the playoffs. Instead of thinking about adjusting his team, he just doubled down and kept on pushing the game further and further away from traditional basketball, ending up with an ugly facsimile of the game that basically turned the game into a random lottery based on shooting exclusively three pointers. I say that as someone that on this board frequently defended Harden's offensive style and found his genius appealing, but it reached a point where it was too much. Once Capela was traded and they went to ultra-small ball I was out.
The frustrating part was that if you on paper said that there was this GM who came up with this crazy strategy to win a championship that many people doubted, and his team consistently flamed out in the playoffs, and he put the team in salary cap hell, you would assume he would not only be fired, but he would be one of the worst GMs of the decade. Morey got an enormous amount of slack because the analytics community liked him and his logic was statistically friendly. Progressive minds thought it was great to cut out inefficient mid-range jumpers, to get rid of offensively limited big men, and to play fast with as much spacing as possible. The logic is sound, but Morey pushed it way too far and refused to make any real adjustments to his philosophy that may have unlocked a more sustainable version of the Rockets, digging himself deeper in the process and now painting a bleak future for the Rockets, despite still having a durable Top 5 NBA player in his prime.