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A collection of Non-British Subjects would be impossible to control. The colonies were more valuable as unimpeded
sources of raw materials. Equally important, the Rothchilds were concerned they would not have their loan to the
crown repaid and the potential for another credit consuming nation was appealing.
BTW, Who was the last President to leave office with a ZERO balance national debt?
Your premise is unfair and inaccurate. The Brits did make several strategic mistakes which could have possible won the war for them early on but they did not give up easily. England wasn't intersted in the colonies for the land as much as for income/raw resources/source of trade that the colonies provided. The war shut the colonial market off to British goods, people were tired of the war, etc.
Equally important, the Rothchilds were concerned they would not have their loan to the crown repaid and the potential for another credit consuming nation was appealing.
The Rothschilds weren't influential during the time of the American Revolution.
The British did end up practically fighting a world war. At the same time that they were fighting the Americans, they were fighting the French and others. When all of the peace treaties were signed, the ONLY country that they "lost" to was the colonists.
The Spanish got Florida back from Britain, they'd lost it as a result of the Seven Years War.
The war raged from 1775 - 1783, a period of 8 years. The British hardly "gave up so easily". During that time they had many victories, some great some minor and a couple of defeats, some great some minor. Throughout it all what they could not do was force Washington's army to retire from the field and disband. Utlimately it was not battlefield prowess or victories that brought the British to the point of giving up, but sheer determination to keep the fight going.
As the war drug on sentiment in Britain turned against continuing the war. Almost from the beginning there was a very vocal minority who believed the colonists had a legitimacy to their demands. As the situation grew worse and worse for Britain eventually enough support built in Parliament to end the war and let the colonies go. The British faced several issues in prosecuting the war.
Britain had a rather small army. At the outbreak of the war there were 8,000 British soldiers in all of North America. The entire global British army stood at 48,000 troops. Britain had a huge empire and a large demand for soldiers to secure it and a rather small population to draw from. Even as Britain grew its army into a peak strength of 56,000 regulars bolstered by around 16,000 Hessians and numbers of local Loyalists, they simply lacked the ability to both win the battle and occupy the territory.
In Europe occupying the enemies key cities or capital is what led to surrender. Given the de-centralized nature of the American government and the colonies, occupying Boston, New York, Philadelphia, Charleston, etc. was never seen as a major setback. The British easily had the strength to take whatever area they wanted, but they lacked the manpower to effectively occupy it.
Supply was another major problem and logistics were a nightmare for the British. Overland supply on sustained operations was virtually impossible do to guerilla attacks. The army remained virtually tied to the coast if it hoped to survive. On top of that all reinforcements, supplies, messages, etc. had to be moved by ship. It could take up to three months for a convoy to cross the Atlantic and the situation on the ground may have radically changed by the time it arrived.
While Loyalist support was dependable, it was not large enough in most cases to effectively occupy or control a localized area. When the British army was in the area, the Loyalist militias could gain control. As soon as the army moved on, the Patriot militias emerged and took back control. Without troops to spare for occupation duty and a massive area to occupy at that, the British could never pacify any territory. Making pacification even more difficult was the fact that Loyalists and Patriots would often live side-by-side in the same community. Brutal acts of repression that were often used in Ireland and Scotland wouldn't work because they would impact the Loyalists as well or turn neutral parties into Patriots. You can see this interplay most famously in the Southern campaigns.
With the entry of France, Spain and the Netherlands into the war as active participants the war became global. The French and Spanish attempted to sieze Gibraltar. France and Spain prepared plans for an actual invasion of England that forced the British to retain large numbers of troops at home. The French ravaged the British possessions in the West Indies. The French and Dutch attacked British possessions in India. British merchantmen were siezed by the other powers, etc. These actions stretched Britains navy and army to the breaking point as the manpower shortage became accute.
While this may all seem like periphery actions versus what was going on in North America, the truth is that the actions in the West Indies and India had a far larger impact on the British than what was happening in the American colonies. The reason is that economically the American colonies simply weren't worth much. They were largely self-sustaining and while part of the empire, they contributed little in the way of major cash crops of the time. The idea of the "raw resource colony" was not what the American colonies were. The American colonies were settler colonies and more an extension of British territory than a colony in the traditional economic sense. There was little economic value for Britain in the American colonies versus the vast plantations of the West Indies and India that turned out sugar, coffee, spices, dye, cotton, etc. Even tobacco was no longer the major cash crop it had been and was now being grown in other colonies.
When push came to shove Britain was faced with the choice of giving up the American colonies in order to preserve the rest or risk losing everything. They gave up the American colonies and it was not an extremely hard decision given the value of their other possessions.
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