What did Mr. Gradgrind do wrong when raising his children in Hard Times?

The fact-based upbringing provided by Mr. Gradgrind
resulted in Louisa and Tom becoming emotionally stunted and detached. The complete lack
of any kind of encouragement to help them imagine and develop any of their more
sensitive characteristics resulted in Louisa's emotional inaccessibility towards
everyone and Tom's bad character. It is interesting that when Mr. Gradgrind tells Louisa
of Mr. Bounderby's proposal, that he again returns to facts and how these should be the
only influence upon Louisa's decision, rather than appealing to her feelings and
emotions. One of the most poignant and moving moments of this excellent novel, in my
opinion, comes towards the end of the story when Mr. Gradgrind realises some of his
mistakes and has to confront Bounderby with them as
well:

"I
think there are... I think there are qualities in Louisa, which--which have been harshly
neglected, and--and a little perverted. And--and I would suggest to you, that--that if
you would kindly meet me in a timely endeavour to leave her to her better nature for a
while--and to encourage it to develop itself by tenderness and consideration--it--it
would be better for the happiness of all of
us."

Here we see a man bowed
down with the realisation of how he has impacted his children's lives for the worse, and
trying desperately to salvage something beneficial from the situation now but also
recognising how much damage he has actually done and how hard it will be to repair
it.