One does wonder what they were thinking.
Looking at the 1935 treaty it seems rather obvious that the Germans still believed in the submarine and were willing to sacrifice surface ships to get them.
Even if they built submarines up to the 100% limit of British submarines every ton of submarine construction had to come out of the 35% total. Which might mean the German surface fleet (if they kept their word) could be under 30% of the British surface fleet.
Despite the experiences of WW I it seems few, if any, of the decision makers in the mid to late 30s and even 1940 had any real idea of how submarine warfare really worked. Harris criticized the use of aircraft to go swanning about all over the ocean looking for subs, yet that is precisely what some naval commanders not only wanted to do but did do with expensive ships with large crews burning oil fuel by the hundreds of tons per day. (and lost the Courageous in the process).
A sub that is sitting in the middle of ocean a hundred miles from a merchant ship or convoy is no more effective than one in port.
A convoy not only limits the chances of a sub finding a target it brings the sub to where the escorts are. The sub has to try to sneak past the escorts instead of escorts/anti sub ships roaming the ocean. You are bringing the subs to where you can concentrate your ani-sub ships and your aircraft.
as far as aircraft flying patrols (swanning about the ocean) the early subs in WW II had somewhat limited range. Most of the Type IIs were lucky they could go 2000 miles and the first ten type VIIs were good for 6500 miles. What is more important was the amount of food/water they had. Every day spent under water and running on batteries was a day they weren't able to effectively search for targets and a day closer to when they had to turn around and head for home. a day spent at 4 kts instead of ten needs the same amount of food/water for the crew.
This "endurance" problem was, or should have been known to military planners ( who had been working out such things as the amount of feed needed for horses since the 1700s, or the amount of food and water on sailing ships).
I tried to point a few moments in time or a few factors that might have changed the historical flow. Like the 100lb anti sub bomb. The sooner it was realized that it wasn't even close to an effective weapon the sooner a substitute could have been worked on and the sooner an "operational requirement" formulated for an airplane to carry at least a pair of the more effective weapon. Like a 660lb weapons load instead of 360lbs.
Making a requirement that a twin engine aircraft had to be able to stay in air on one engine (even if at 1000ft).
It would also help, if once the
plans shifted to monoplanes, they actually tested and developed weapons that could be dropped at monoplane speeds and altitudes. There was a months if not year gap between issuing monoplanes and development and issue of weapons that could be dropped at over 100kts and 100ft. One book claims Beauforts in 1940 could not use torpedoes because the higher speed of the Beaufort caused the torpedo to malfunction when dropped (a big reason for that tail and perhaps a forward shroud). Please note that most(all) photos of the pre war biplanes the torpedoes do not have to break away tail structures. They didn't need them at the speeds altitudes they dropped from.
This incompatibility is also surprising given the requirements for big bombers to carry torpedoes although one shudders at the thought of an Avro Manchester trying to fly at 100ft off the water and under 100kts into anti aircraft fire.
None of this requires engines that didn't exist at the time or fuel that didn't exist or radar/sensors that didn't exist. It just requires a few people to lokkback at WW I and see what worked and what didn't and go from there. Add in some minimal testing of the weapons you plan to use instead of living in LA-LA land that some tiny bomb that was 44% the size of the most common light case bomb used in WW I was actually going to work. The yad over ten years to figure that one out.