You gotta figure he just had to make a call. I think both are on target, as well as I think he was a bit anxious to succeed and sent Reno in before assessing the enemy force, then was unable to communicate with him as the Cheyenne were able to intercept messengers, a factor that he had normally had to face. Going back to your original thought, he did underestimate Crazy Horse, but he would have survived without splitting the force. Interesting stuff, as I lived a few miles from Beecher’s Island battlefield in Colorado and have a pretty good understanding of the battle for the West.
When you consider that the small force at Beecher's Island was able to withstand multiple Indian attacks and hold on for a week or so, it's obvious that Custer should have been able to had he not divided his force. He may not have been successful against the villages, but he would have survived with far fewer casualties.