Metro was the failed gamble
I am no fan of Elop (I was a fairly well-known developer in the Maemo community and I use a Jolla phone today) but, with hindsight, I think it is clearer to understand what went wrong.
First, as Andrew points out, Nokia had become dysfunctional long before Elop. Eventually the board recognised this and they made the decision to go with Microsoft: that is the reason they hired Elop. You can certainly argue, with hindsight, that that was the wrong decision -- they should have gone with Android -- but it seemed a reasonable decision at the time.
Even at the time, everyone in the business knew that it was almost impossible to create a viable third platform (after Apple and Android) no matter how good it was. The problem, as everyone recognised, was apps: app developers would not develop for a new platform unless it had massive numbers of users, and the users would not come unless there were lots of apps. Maemo/Meego/N9 had proved this. [This is just a repeat, of course, of the VCR industry -- except in that case the three platforms were reduced to just one -- but it was also content availability which forced that].
However, Microsoft thought they could use their massive power, and deep pockets, to prove everyone wrong. And they came up with an interesting idea to make it happen. One which actually seemed to have a chance of working: Metro.
Metro was an attempt to create a platform which would work for the PC, tablets and phones. The idea was that a large proportion of the massive number of Windows PC apps would become available for tablets and phones, which would kickstart the takeup of Windows Phones. The large number of users of Windows Phones would then attract IOS and Android app developers to port to the platform (also making those apps available to desktop users as well, as a side effect).
I can still see why that was attractive. It is the only sensible idea anyone has ever come up with for breaking the IOS/Android duopoly. And I can see why it was attractive to the Nokia board: Microsoft was about the only company which could make a strategy like that successful. I expect the Microsoft board told the Nokia board that they saw this strategy as the only future for Microsoft -- something they may still be right about.
In the end, even Microsoft couldn't do it. Even with hindsight it is hard to say whether the delays and compromises in Metro were the cause or whether the idea was never going to work. For whatever, reason, it was a gamble which failed. Nadella's challenge is to salvage a future for Microsoft with it knocked back to just being a desktop PC platform vendor and business software vendor.