The Royal Navy internal review looked at events surrounding the shooting of an injured captive by Sgt Alexander Blackman in Afghanistan four years ago.
It said he let professional standards "slip to an unacceptably low level".
Blackman also had difficulty switching his mindset from killing his enemy to giving them first aid, it added.
The killing, on 15 September 2011, took place after a patrol base in Helmand province came under fire from two insurgents.
One of the insurgents was seriously injured by gunfire from an Apache helicopter sent to provide air support and the marines found him in a field.
Footage from another marine's helmet-mounted camera showed Blackman shooting the Afghan prisoner in the chest with a 9mm pistol.
A court martial board heard that Blackman told him: "There you are. Shuffle off this mortal coil."
Blackman's senior rank meant that others in his patrol were put off questioning his orders or challenging his actions, the report said.
It also criticised his unit, 42 Commando, as a whole, saying it was perceived by many outside as "overly aggressive".
Despite representations however, the Brigade Commander judged its approach to be "appropriate given the circumstances", the report said.
It went on to say a "number" of those involved directly and indirectly felt the chain of command had failed to provide them with adequate support before, during and after the court martial.
The Ministry of Defence said it was releasing the executive summary of the report in recognition of the public interest in the case.
Two paragraphs have been redacted and there are no plans to publish the review in full.
Blackman, of Taunton, Somerset, was convicted of murder in 2013 and lost an appeal in May last year, but his 10-year minimum term was reduced to eight years.
Supporters say it was manslaughter, not murder, and have launched a campaign to review the case.
Author and campaigner Frederick Forsyth said the Ministry of Defence was trying to "pile every single thing that went wrong" in Helmand on to one sergeant.
"They sent 15 men to the most dangerous square mile in the world for five-and-a-half months unvisited, unrelieved, under-resourced, and then when one man, at the extremity of exhaustion made a mistake, they are saying it was all his fault," he told BBC's Victoria Derbyshire programme.
Conservative MP Richard Drax, a former soldier, said Blackman was "just a man pushed to the very edge, sent to do a filthy job with his hands tied behind his back".
Speaking to MPs at Westminster Hall, he said Blackman was paying a terrible price for a "momentary lapse of judgement" and called for the full review to be published.
He added that Colonel Oliver Lee, Blackman's commanding officer at the time of the shooting, resigned in protest over the marine's treatment.
In his resignation letter, Lee wrote that Blackman was sentenced by an authority "blind of facts that offered serious mitigation".
"The cause of this is a failure of moral courage by the chain of command," he also wrote, Mr Drax told MPs.
A Royal Marine jailed for the murder of a Taliban insurgent was "morally disengaged" and showed "poor leadership", a review has found.