I think that’s more to do with Hearts of Iron not being fully realistic in Germany’s industrial capacity. All the memes and myths about them make them out to be far more capable than they really were in reality and HoI are matching that perception.

In reality, Germany’s success was largely due to huge risks and brinkmanship, and the Allies kept backing down and letting the Axis take bites out of them. There were many points in time where any allied response would have wiped out the German military, particularly their invasions Alsace-Lorraine and the Sudetenland. On top of that, all of the Axis had military doctrines based on fast, intense, and most importantly short campaigns where they could soly rely on stockpiles.

Once the Axis achieved some (admittedly large) successes, they started believing they could take on the Allies in a full scale attritional war, which is what eventually ground them to dust. They could have potentially won if they kept taking small bites, but that’s not the war that was fought.