Certainly he did a lot of things wrong, though I think he is most similar to the last true King of France Louis XVI who inherited a land where the aristocracy were disenfranchised without the populace having the means or the social structures to govern themselves.
The Russian government was set up like the old French monarchial government to depend on the king or czar. There was no infrastructure underpinning the whole. When a country had a charismatic governor like Louis XIV, a small geographical area like France and pretty good economy and external political situation, then it could work but more often than not it didn't and even when Louis XIV made it work, he drove the country into debt so that his successors ending up paying for it. Louis XVI tried an assembly of the Estates Generales similar to the Duma but it ran away from him. The time of transition between the time the nobility loses its power and the common people gain their power and the infrastructure to support it is fraught with danger for the people and the state. The whole environment is insecure and can't easily be solved by a single policy.
In a nation the size of Russia, the problem was far worse than it ever was in France. The nation did not have a unifiying force. The czar tried to be but it was impossible to unite such disparate peoples.
For example, the Russians desperately needed the Port of Port Arthur on the Pacific to maintain its lands in the East; however the Russian Europeans had little interest for what happened in the East - it was too far away. Nicholas did see that danger correctly but he had little support, so they let it get away. The Russo-Japanese war was a failure but not because it was not worth fighting. It had no support in the European centric Russia.
I don't think Nicholas was capable of uniting. That was part of the problem. There were certainly tsars before him that were capable of this, but he seemed to lack the flexibility it take to accomplish this. I don't think he knew how.
The Russo-Japanese war was a failure because Russia could not sustain it. The military was poorly equipped, there were logistical problems and then there was the incompetence of the High Command. Figes writes that this war could have been avoided had it not been for Alexander Bezobrazov whose main interest was protecting his lumber assets in Korea. He was one of several who convinced Nicholas to reject Japan's offer of a compromise which could have avoided war. The atmosphere in Russia during the war was plagued with racism against the Asians.
Nicholas saw the war as a way to increase patriotism and hoped that the Russian people would rally around their tsar. It was about political capital and Nicholas hoped it would strengthen/restore the bond between the tsar and his people. It might have worked, had Russia won.