Contrary to popular belief, Ferrari is not the fastest car. They are faster on certain circuits, but the majority of the other circuits suit Mercedes more, sometimes to a horrifying degree (see Britain, Italy, Abu Dhabi). It was going to be an uphill battle against Mercedes.

What lost it for Ferrari, however, was the reliability incidents in Malaysia and Japan (A 1-2 in Malaysia was likely for Ferrari, and most likely a 2nd place in Japan, that lost Vettel ~37 points), and the racing incident in Singapore (Lost Vettel around 28-38 points). Vettel's mistake in Baku was also a cause, but the Asian races were what killed Vettel's chances in the championship.