I think there's two answers to this question.

For Musk, the answer is pretty clearly that he thinks Twitter is poorly run as a business and has no respect or confidence in their management. He thinks he can change the company to make more money.

For all the VC types he's texting with, Twitter is broken because it bans people, and because (they believe) those bans are biased against conservatives. The ban (actually a suspension) of the Babylon Bee twitter account for a satirical article naming a specific individual transwoman "man of the year" seems to have been a radicalizing moment among the tech oligarchy