There are five fatal flaws with the mechanic:
- Firstly, the advantage that Dynamax gives, in theory, should be relatively similar between each Pokemon. In practice, the fact that all status moves turn into what is effectively Protect means that defensive Pokemon are weaker while Dynamaxed then they are normally, as they can't use status moves to set up hazards, deal residual damage, lower (or nullify) stats, or recover - which are absolutely essential to any sort defensive Pokemon. Their only option is to use Protect, or use a weak offensive move that any remotely bulky Pokemon can outright wall.
- On the other hand, offensive Pokemon get pretty much everything they could have wished for. Not only do Max moves have a very high base power (around 130-140), but you are able to use hold items while Dynamaxed. This leads to utterly stupid stuff such as having Max Moves hit as hard as Z-Moves in Gen 7 with a Life Orb, only now, you get to use said Z-moves 3 times!
- Since Dynamax doesn't need a hold item to be used, unlike Z-moves and Mega Evolutions where you had to commit a Pokemon as your Z-Move/Mega Evolution abuser, you do not need to commit a Pokemon to use Dynamax. As a result, removing Dynamax as a threat to your team is extremely difficult. In Gens 6 or 7, if you made a good prediction, you can KO the opponent's Z-Move/Mega Evolution abuser on the switch-in, and remove that mechanic as a threat entirely. You cannot do this with Dynamaxing. If you KO, say, your opponent's Gyarados, you aren't out of the clear by any means - your opponent still has Excadrill, Barraskewda, or Hawlucha that can Dynamax and completely screw you over. This makes Gen 8 competitive reliant on prediction to an absurd degree - as guessing which one of the aforementioned four Pokemon that your opponent will Dynamax is effectively a coin-flip at best, where (thanks to the next issue) the punishment for guessing wrong is often an guaranteed loss.
- Even worse, Max Moves have secondary effects. These range from stat drops (annoying, but manageable), to terrain and setting up weather (if Barraskewda sets up Rain with Max Geyser, you're screwed), to stat boosts. The stat boosts are particularly problematic, as they can stack - the most notorious examples of which is Max Airstream from Gyarados, which is pretty much Dragon Dance with 130 base power and STAB, or Hawlucha, which gets STAB Max Knuckle and Max Airstream, coupled with 118 base Speed with a +2 boost from Unburden. It's incredibly easy for a Dynamaxed Pokemon to snowball out of control as it accumulates boosts. For instance, if you get in your Hawlucha check, in anticipation of having it Dynamax, then your opponent can simply switch in to Gyarados (or Excadrill), boost or Dynamax and get a boost while you switch out, then sweep your team while it is Dynamaxed. When the Dynamax ends, you still have to face a Gyarados at +3 Attack and +2 Speed.
- Gamefreak, for some unholy reason, decided to remove most forms of counterplay to typical sweepers for Dynamaxing. Protect/Substitute doesn't work because the Dynamaxed Pokemon is still accumulating boosts. Red Card and phasing doesn't work as Dynamaxed Pokemon cannot be forcibly switched out. Switching in a defensive Pokemon to Dynamax as a defensive measure is incredibly risky as not only it the opportunity cost of doing so incredibly high (you lose out on your own chance to sweep your opponent with Gyarados or Hawlucha), but chances are that your opponent already has a boost by the time your defensive Pokemon is on the field (again, this presents another prediction that is heavily weighted in favor of the Dynamax user). Dynamax removes the Choice lock, so that if you switch in a Toxapex against your opponent's Scarfed Galarian Darmanitan locked into Flare Blitz, it can simply Dynamax, remove the Choice lock, use Earthquake and KO Toxapex in return. Similarly, the HP boost makes it difficult to revenge kill a Dynamax abuser (Rotom-Wash's Thunderbolt fails to OHKO Dynamax Gyarados, and is OHKO'd in return with Power Whip even without a boost).
For all of these reasons, almost every playstyle that isn't hyper offense is severely weakened - and stall, in particular, is all but invalidated, because even a strong defensive Pokemon such as Toxapex or Ferrothorn cannot withstand a +2 Attack Gyarados or Hawlucha throwing out what is effectively Z-moves. Likewise, banning key abusers won't do much to help - if you ban Hawlucha for instance, there's Togekiss waiting in the wings with Max Airstream to boost Speed and flinch opponents to death.
As such, almost every competitive match that I've seen or played ended up going to the person who was able to Dynamax their abuser first.