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

I think that Gradgrind's fundamental problem in raising
his children is that he pursued a philosophy that unfairly embraced the emphasis on end
product and success, as opposed to any other criteria that he would consider "fancy." 
The quantifiable, the material, and the empirical is the end to which Gradgrind assigns
weight.  In the final analysis, he fails to educate his children on the sentimental and
affectual that helps to create bonds and create the bindings to individuals in the
pursuit of a collective notion of the good.  Louisa says as much as this to her father. 
At the same time, when confronting his son, Thomas says to his father that he cannot
help "laws" that govern individuals to behave in a duplicitous way to another.  In the
end, Gradgrind recognizes this, sitting in the setting of the circus with his son, a
physical representation of the folly of his raising children.  In this light, I think
that his biggest mistake would have been evident.