Gatsby's downfall seems to be a result of two related traits--his inability to let the past be the past, and his inability to see through and beyond illusions--especially illusions of his own creation. Gatsby had crafted his own persona and his own love for Daisy. Fitzgerald writes: "There must have been moments even that afternoon when Daisy tumbled short of his dreams--not through her own fault, but because of the colossal vitality of his illusion."
Later, Gatsby is distressed because Daisy won't disavow the past. Gatsby believes his life with Daisy should pick up where it had left off. He fails to understand or even acknowledge the importance of Daisy's experiences during their time apart. Nick reminds Gatsby that the past can't be repeated...but Gatsby doesn't buy it. "'Can't repeat the past? he cried increduously. 'Why of course you can!'"
Nick notes that Gatsby talked a lot about the past and that it seemed like "he wanted to recover something, some idea of himself, perhaps, that had gone into loving Daisy."
It's Gatsby's illusions, I think--of time, people, and even the nature of love--that are his real problems. The interior rules he has created do not match reality, and he's ultimately doomed by that.