The corruption of the Catholic Church in Germany; indulgences, relics, poor priests who did not fulfil their duties etc. greatly angered many people who simply felt that they were being conned.
The state of the Catholic Church in Rome. At one time there had been two popes at the same time. How could the people respect such an abuse?
The popes themselves were barely religious figures representing God on Earth. Popes were frequently involved in war and political intrigue. How could they represent the pinnacle of holiness?
Vast sums of money were flowing out of Germany towards Rome which could have been put to very good use in the states that formed Germany.
If it could have been kept in Germany, society would be more stable as the state leaders could continue to tax their people who would have more money as they would not have to pay their dues to the Catholic Church.
The philosophy of Luther effectively took away the power of the priest. Justification by faith alone was an individual belief though Luther saw the value of good priests who could teach the Gospels in a simple manner and in German.
The peasants were initially pro-Luther as they suffered the most from the abuses of the Catholic Church. The work done by Luther greatly benefited them. His rejection of the peasants in the revolt of 1525 did lead some to look to more extreme beliefs such as the Anabaptists.
Germany was criss-crossed with major river systems such as the Rhine, Moselle and the Elbe. A large part of trade was done via the rivers and stopping the trade of Germany would have been impossible. Most of the major towns and cities of Germany were based on rivers and it is through these that the ideas of Luther flowed and could not be stopped. How could even the most powerful princes stop trade as it would have an impact on them?
The printing presses increased the chances of Lutherism spreading. Luther himself had failed in his attempt to stop the spread of the “95 Theses” as it had been printed already.
How can a state leader or emperor undo what had already been done and produced ? Once Luther's ideas were out how could they be suppressed?
What could the pope actually do? How could a pope enforce his authority? For this he traditionally relied on the emperor but Charles V had far too many interests in Europe and he was most concerned about the Turks in the south-east of his empire. The emperor also relied on the German princes to provide him with troops in time of war and they were hardly going to provide Charles with troops to use against themselves!! Charles himself, like all emperors, had an army that came from his territories - primarily Austria. So the leader of the Catholic Church could not defeat Luther and the temporal defender of the Catholic Church could also not do this.
The support of the princes was important. Some converted their states for religious reasons (John of Saxony and Philip of Hesse) while others used the whole Lutheran issue as a way of expanding their political power at the expense of the emperor. Many had much to gain by taking from the Catholic Church its property and land. Also the money that stayed in their states was a valuable source to tax but it also ensured social stability which could only benefit the state itself and therefore the position of the state leader.