Ultimately you have the contention between bureaucracy and that their security was geared up for a much more minor incident - a park wide malfunction of that type wasn't "supposed" to happen - hosts weren't supposed to have that level of ability to decide things for themselves, etc.
Initially a lot of information was suppressed and those higher up probably didn't believe it was as bad as it was either and more interested in protecting and probably removing any signs of their own project before any wider enquiry or spotlight was placed on the incident.
Going to a full military capability to contain and stabilise would have probably been a last resort and the next step that we don't get to see due to how things unfold.
This is how I viewed it. You've got a large corporation who knows it's been up to naughty dealings, they have some kind of insurrection at the park, they potentially don't know the severity especially in terms of the sentience of the hosts and could believe they're just going in to mop up a bunch of rogue robots who have become corrupted. If they do have a higher awareness of the issue how much are they relaying to the team on the ground?
In addition to all of that they have a vested interest in keeping the operation as small and low key as possible. At this stage you've got to assume they're doing as much as possible to keep the situation out of the public eye, especially given they seem to be the Westworld equivalent of Shin-Ra, or Weylan-Yutani. Finally even towards the end of the episode where they've won and are presumably completely clued up on what went down, they're still looking to identify potential salvage which suggests they intend to rebuild. With that in mind their best option from the beginning might have been something a bit more surgical than just destroying everything they can find with drones.
I'm not going to deny that the soldiers themselves lacked competence but the unprepared elite forces thing isn't just a trope of bad sci fi as another poster suggested, it's a trope of sci fi in general. It's a cornerstone of the natural (or man made) forces growing beyond your capability to contain concept and is indicative of the hubris shown by Delos in believing they could play God.
In terms of the series overall I was underwhelmed for about 4 or 5 episodes but then I really got into it. Having said that, whilst I like the depth of the show, I do fear it's starting to get bogged down in the metaphysical aspects of reality, I know they're aiming to kind of hold a mirror up to existence in a way but I feel like we might end up with something that is too dense and convoluted. I will definitely be tuning in for the next season though.