It's quite silly to question the LW as being the preeminent airforce in the world in 1940- they were better equipped and better led in tactics than then RAF. During the BoB the RAF learned some very hard lessons, the ill-conceived Defiant and 'Vic' formations are prime examples. In 1941 the RAF's performance over France was pathetic- the attrition in Spitfires alone was almost criminally negligent.
The BoB campaign was really aimed at imposing a cost on the British and challenging the will of their citizens to continue hostilities against Germany when they were cast out of the continent of Europe. The intransigence of Churchill and the unexpected resilience of the populace were what thwarted the German offensive.
The British failed to learn the lesson however and made exactly the same mistakes against the Germans when they started to take the offensive in the air. The Germans developed a coordinated air defence, chose which raids to confront, and the German people displayed the same stoicism as the British had when bombs fell on their cities. The RAF performance during the Dieppe raid was a travesty.
What the Germans didn't do however was gear their industry for full war production until Speer took over in late 1943- far too late. The LW never acquired a large enough strategic reserve and each pilot basically flew until he was dead, captured or crippled.
The attrition finished them in the end- their men were men after all, not ubermensch.
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