I have a theory on part of why Russia and Iran managed to function as paper tigers for so long.
It's the Pentagon's fault.
Anybody that knows more about this stuff is welcome to correct me if I'm wrong. Here's my pitch:
If you're the dude that's in charge of wargaming this stuff, all of the institutional incentives line up in the direction of playing up how scary the enemy is and how you need a bigger budget. It is a fact of reality that every institution, of any sort, exists to maximize its discretionary power and budget, even if the ultimate motivations are more complicated discretionary power + budget expands the choice set of how you can achieve that goal. Is. A. Fact.
Now, if you come along and say, "Iran is in fact quite mid" that DOES NOT drive panic and fear and look good on C-SPAN if Congress votes you another six gorillion dollars for procurement. If you say that you also look negligent, potentially, to your immediate superiors, and your superiors may pressure you to phony stuff up too. So you will always, always present things through a catastrophizing lens. This then gets passed on to the civilian administration, the media, and that in turn constrains the ability of your military to act.
Then add on the second layer to this: when we wargame, we are not in fact wargaming against Iranians, we are wargaming against an Iranian OOB commanded by Americans. Even to the extent you're supposed to replicate however that other army works, makes decisions, "don't act retarded, do take this seriously" is Wargaming 101, so you've got this 200 IQ Gigachad American officers playing 70 IQ Middle Eastern/Slavic retards, and that dramatically overestimates how competent they're going to be.
The irony of it all? Taking your job seriously, obeying that central rule that you never underestimate the enemy, paralyzes you like McClellan against the Army of Northern Virginia.
"The only thing we have to fear is fear itself."
