Gotta give it up to the most successful part of the test. The belly flop was INCREDIBLE. Such cool tech and science
The belly flop is a cool idea, but is also probably the cause of the failure. Flipping back to vertical that close to the ground means your fuel is sloshing like mad as you fire the engines to stop the descent. I think they said they lost pressure in one or more of the pumps, so engines cut out, and they didn't have enough thrust to avoid a relatively high velocity impact. Not surprising, really. More surprising that they tried to flip to vertical that close to the ground. But Elon likes explosions, so there you go. I would guess the next attempt will flip earlier (with just the attitude thrusters?), but that requires more fuel since the reduced profile in the vertical position will cause some acceleration relative to the belly flop.
The whole issue with this vehicle is how to land safely with minimal fuel when returning from orbital velocity. Lots of success in this test to be sure, but with a hop like this they are just trying to land from a velocity of roughly zero at an altitude of 12 km. The real goal is to be able to land starting at an altitude of >100 km and velocity of ~7 km/s. Or perhaps reentry velocity from Mars of 11 km/s. Still a long ways to go.