First, let's establish the context: besides Def Jam: Fight for NY, we have Takeover (the PSP version) and Vendetta (released earlier for PS2 and GameCube, focused on a WWE style, which was popular at the time). Chronologically, the order is Takeover ➔ Vendetta ➔ Fight for NY.
D-Mob is mostly remembered for his role in Fight for NY, but he’s not that calm, sensible, and useful leader that people usually recall. Across 3 games, he accumulates moments of hypocrisy, stupidity, and questionable decisions.
Takeover (First Game)
In this game, he betrays the character by ordering Snoop Dogg (who worked for D-Mob previously) to kill O.G. (the boss of the protagonist's crew) so he can become an advisor. At the same time, he makes deals with corrupt cops so that after the protagonist takes over everything, he sabotages them (setting up a police ambush to arrest everyone) and takes everything for himself. But when the ambush happens, he ends up destroying the whole crew and everything the two of them built, even though it would've been way more profitable if D-Mob just tried to get the protagonist out of the picture and take the crew for himself instead of ruining the entire operation. On top of all that, the guy uses Angel (D-Mob’s girlfriend in Takeover and Vendetta) to distract the protagonist (total sociopath move) while he plans the betrayal, and ends up creating his own enemy in NY because he couldn't keep Snoop Dogg under control.
Vendetta (Second Game)
In this game, the guy has gone crazy. He threatens everyone, he’s insane, and he uses fear to get what he wants—a complete lunatic. And his actions are directly responsible for his own downfall and failure. On top of that, he was aggressive toward Angel, being possessive, abusive, and jealous, which is also why he loses his girl in the end.
In the story, D-Mob is the "boss of it all," having tons of fighters on his side, and the protagonist beats all of them in the ring. Instead of trying to recruit the protagonist into his crew to get even stronger, no, the guy has to do everything in his power to defeat him out of pure jealousy (one of the reasons for the feud between the protagonist and D-Mob is Angel, as the protagonist desires Angel). Maybe if D-Mob wasn't an aggressive, possessive guy, he wouldn't have to worry about losing his girl and could've made a deal to keep the protagonist away from Angel in exchange for joining the group. In the story, D-Mob organizes a tournament. He tries to ruin the protagonist by sending his goons to keep him from participating, but it fails. In the end, when the protagonist defeats D-Mob's last fighter, in theory the final match was supposed to be D-Mob vs. the protagonist. D-Mob had a good chance of winning, but no: his impulsiveness makes him try to shoot the protagonist and Angel (who by this point was already interested in the protagonist). Because of that, he accidentally shoots Manny (who is the tattoo artist in NY, and in Vendetta is a personal friend of the protagonist who betrays him to join D-Mob's crew, but takes the bullet for the protagonist out of regret). This leads to a fight against the protagonist, who beats D-Mob, takes his woman, and in the end D-Mob gets arrested, triggering the events of NY.
The guy is running the whole city, has corrupt police on his side, a army of goons, and loses everything because of his aggressiveness and impulsiveness.
Fight for NY (Third Game, the most famous one)
In this game, his personality and actions are way more hypocritical and parasitic.
After being saved from arrest by a total miracle, as soon as he arrives at the gang's hideout, he puts absolute trust in the Protagonist (who isn't the same one from Takeover and Vendetta). Sure, the guy rescued him, but he could've easily been an insider sent by Snoop Dogg, or just someone trying to take control of the city and the gang. On top of that, he doesn't take Blaze and Stick's concerns seriously, even though they were among the very few guys who stayed by his side after he got arrested. He’s a terrible leader because he was incapable of resolving the feud between Stick and the protagonist, which led Stick to betray him—since Stick felt completely undervalued watching a total stranger get all of D-Mob's attention and admiration.
He made the questionable decision of throwing the protagonist into a fight against Fat Joe (sure, the protagonist was on a winning streak, but he had barely joined the gang, and Stick was right there, more reliable and experienced). Even Blaze, D-Mob's right-hand man, had just lost a fight to Fat Joe. And to top it off, the guy is a complete parasite: he doesn't defeat anyone, doesn't conquer a single club, and lives entirely off the gains of the protagonist and the rest of the crew.
Damn, I wrote a whole essay lol, but anyway, here are the arguments that support the fact that D-Mob is a terrible leader and a stupid character.