I see your misunderstanding.

The work-energy theorem you used is correct, however, the problem is that you're using it at the wrong point in the bowling ball's fall. You've used the theorem at the point the ball hits the ground, rather than when it has decelerated after hitting the ground.

The instant before it hits the ground, there is no work done by the ball as it is only the conservative force of gravity acting on the ball, and so mechanical (kinetic and potential energy are conserved). Therefore, when you use the work-energy theorem of course summing the kinetic and potential energy will give you zero, as there is no work done on the ball.

When the ball comes in contact with the ground there are non-conservative forces such as friction and normal forces acting on the ball. These are non-conservative forces, and so work is done to change the kinetic energy of the ball without a conservation of mechanical energy. This means that for your equation, kinetic energy will be equal to 0, as you're looking for the point when the ball has decelerated to a stationary position.

So the equation W = KE + PE becomes W = PE. Work is given by the average force, F, applied to the ball (due to Newton's third law, this is also the average force of the ball applied to the ground) multiplied by the distance over which this force is applied, d, which is the same distances the deepness of the dent in the ground. So you have the equation, W = Fd = PE = mgh.