One is that the local current had been knocked out of whack by the Great Tokyo Earthquake that had occurred the week before, causing the ships' navigators to think they were further south than they actually were.
Another theory, which I have read in several sources, is that the navigator on the lead destroyer accidentally turned one lighthouse early and that all of the other ships simply played follow the leader.
Could eight guys get suckered that way? Yeah, they could, especially since there might not be a JOOD on ships of that size for another set of eyes and the Captain may not even be on the bridge. Probably not steaming in formation quite that close to shore might have been the most prudent plan. I'm guessing that came up a few times during the SOPA's courts-martial.
"Knox on the rocks" was a pretty good one too. Was a destroyer run aground because of a popular movie? Could be... ;-)
The DESRON commodore was at fault. The flagship was using radio bearings to navigate, which was a new technology at the time. Many senior officers did not trust it. The Pt. Arguello lighthouse operator gave them a radio bearing which correctly placed the ships still north of Santa Barbara Channel. The commodore insisted the lighthouse operator had given them a reciprocal bearing and that the ship’s DR position was correct. He ordered the turn over the doubts of the flagship navigator and the squadron hit the shoreline north of Pt. Arguello.