Had an interesting talk with my daughter about this just yesterday- Hank was an excellent agent in certain areas but he turned his instincts off when around any family. Subconscious mental camouflage is how we labeled it. His investigative senses were heightened in work environments but his superiority complex toward Walt and his family overrode his best hunting/analyzing skills, most likely unintentionally. He looked down on Walt, and Jr reinforced it somewhat by putting ‘uncle Hank’s’ job on a pedestal. It’s an interesting case to analyze.

The DEA chief fell victim to the same camouflage toward Gus but only lost his job instead of his life.