The biggest mistake Stern ever made was embracing the hip hop culture, because that ultimately led to white males 30-60 losing interest in the league in droves, and only now do you see them trickling back in. An NBA game over the last decade is pretty low down the list of things a suburban white family wanted to do on family night. Much of that is based on stigmas and stereotypes, but these are things that were in Stern's control.
Now that there is a generation of young white adults that grew up on hip hop, this issue is slowly evaporating. But there is no question it set the NBA back, and helped exemplify negative stigmas when a black NBA player would be arrested or get into trouble. When black NFL players get into trouble (at higher rates than NBA players according to most studies), the "thug" stigma is less likely to come into play.
Why? Take a look at the NFL. You aren't inundated with blaring rap music in your ear during every timeout, which was a problem in NBA arenas that has since been corrected. You rarely see the NFL affiliated with non family friendly musical acts or sponsors, especially since nip slip, but again this was something Stern let get a bit out of control a few years ago, and the league is just now distancing itself from that stuff. NFL ownership is an exclusive club. Jay Z owns an NBA team. Rightly or wrongly, there are people turned off by that.
Aside from that period where the NBA was no longer viewed as 'wholesome', to me, Stern has done a great job. Yes, he lucked into Bird, Magic, and Jordan. Bird & Magic were charismatic and non threatening, and Jordan was so good at protecting his image, that he came off that way as well. So while the NBA did a great job marketing those guys, it was also pretty easy.
The current batch of stars is not nearly as likable. Players like Kobe & Lebron (& now Howard) and equally loved and hated, but probably more hated (at least in Lebron's case, maybe not Kobe). The league lacks charisma, and there is not much Stern can do about that. Players like Durant & Paul & Iguodala are invisible personalities, more Clyde Drexler like than Charles Barkley or Reggie Miller, let alone Bird or Magic.
The second biggest mistake Stern has made is still an issue and has not been corrected. The modern player does not respect the coaches or GM's. The star player calls the shots. Players not only demand trades, but dictate the destination. This rubs fans the wrong way.
Stern can not control parity. Basketball has lacked parity since the days of white guys throwing each other chest passes and shooting two handed jumpers. It's the nature of the sport. Luxury tax, Bird Rule, salary cap, all of these things are intended to help, but none do and you cant fix it. It's a star driven sport that can be won by a dominant individual, you wont win without one (or two or three).
The league probably has too many teams. But so do other leagues (NHL, and probably the NFL). Big deal.
The bottom line is the NBA has grown tremendously on the Stern watch. He inherited a drug filled league that was airing the NBA Finals on tape delay at 2am. After a rough period the last decade or so, the league has bounced back and is once again thriving. Overall it's impossible to chalk up the Stern era as nothing other than a success.
