The short version is that the US did a massive wargame in the Mediterranean/Middle East in 2002. A retired Marine Lt. General ran the opposing force, and consistently wrecked the "blue" team (i.e. actual US forces). Eventually, the US did the usual thing and added increasingly unrealistic constraints on the opposing force (op-for). The original op-for commander quit, and the replacement continued to do quite well.
The exercise was called a success, and the US invasion of Iraq happened a year later.
It's also discussed in an episode (including the author of the article) of Lions Led by Donkeys, an excellent military history podcast.
Holy fucking shit. I've never heard about this. God damn it.
In broad strokes, "Man, that was some spicy shit, huh?" In reality, it's not like we're in denial about anything. From a strategic perspective, counter-insurgency is something that is still trained, studied, and evolved-- not to mention still fought. I think it will be a very long time before the last two decades of warfighting is fully unpacked.