Malik was a good option for ODI and T20 captaincy and he should have been given more time, but the likes of Afridi, MoYo, Razzaq etc. were not happy to see a junior player bypassing them. There was no cohesion in the dressing room, and Malik had nowhere to hide after disastrous Asia Cup in Pakistan as well as the Sri Lanka series in 2008-2009.
The biggest blunder was making him Test captain. He was never a Test caliber player and that experiment was never going to end well. Of course, the captaincy circus from 2007 to 2011 where Malik, MoYo, Younis and Afridi all took turns as captain before it eventually landed in Misbah's lap would have been avoided had Younis not refused to take over after the 2007 World Cup, and his decision came as a shock because it was obvious since 2005-2006 that he was going to be Inzamam's successor.
I have been quite critical of his selfish decision in the past, but now I feel that perhaps he deserves some empathy. Woolmer was a father figure for him and he credits him for rejuvenating his career. His death probably devastated him more than any other player, and he didn't think he was in the right frame of mind to lead the team.
That of course doesn't change the fact that he displayed very poor leadership two years later when he eventually got over his grief and replaced Malik as captain. In spite of leading Pakistan to the World T20 title, he lost the dressing room within 9 months.