Besides that, athletes denounced shortcomings in the organization (crowded apartments in the olympic village, low quality of the catering, etc. And of course, the fact that there was a terrorist bombing that killed two didn't help to the games' popularity.
Interesting that in 1936 when Berlin hosted there were 4 German cities in the bidding - Hitler couldn't lose!
So, its possible that there was an internal voting to choose which city would represent Germany (something that has been done in many situations where several cities in a country propose a bid: picking only one means all available resources go behind only one unified bid). And, since the "final list" is a murky mess, all the German cities ended there.
Los Angeles went to win the rights to host in 2028, despite losing an internal voting to Boston, simply because when Boston dropped its bid, LA's City Council were quick to vote unanimously to back a new bid.
Maybe Londoners will contradict me and say London 2012 was a big success, but the trend seems to be toward smaller (as in not gigantic) cities or cities in authoritarian countries.