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World War I could well be described as an identity crisis between two halves of Europe: the Old and the New.
On the one hand, Old Europe had kings, emperors, dukes, and princes lording over submissive populations. On the other hand, New Europe had gone through revolutions in government and technology. The modern world was moving fast, and American diplomats thought the old monarchies couldn't keep up.
One of the themes of Wilson's Fourteen Points was bringing New Europe to the forefront: allowing people to decide on their own governments (preferably through a democratic process), breaking up empires, and reducing military power.
If anyone represented the Old Europe that Wilson wanted to get rid of, it was ol' Kaiser Wilhelm.
Wilhelm was part of the storied Habsburg family, an old and mega-powerful European nobility. They placed kings and princes all over the continent. For example, Wilhelm was related by blood (first cousins!) to the King of England. He was also related to Tsar Nicholas II of Russia, who got booted out by socialists during the Bolshevik Revolution.
In that sense, World War I was sort of like all those times you played tag with your cousins at family reunions. But only sort of—when you play a friendly game of tag, normally millions of ordinary people don't die.
At the end of the war, the Treaty of Versailles specifically blamed Germany for starting everything, even though the trigger point was the assassination of Archduke Franz Ferdinand. Today, historians debate just how much blame Wilhelm II deserves. (Source)
He was known to be an erratic ruler. Born with a crippled arm, he went to great lengths to hide his disability and overcompensated with a hyper-militant attitude. In 1908, Wilhelm gave a disastrous interview with an English newspaper, in which he talked smack on the British and ranted about how awesome Germany was. Wilhelm's advisers in the German government allowed the interview to be published, undermining the Kaiser's credibility.
By the end of the war, his influence had faded as non-royal German military leaders took the reins. The sun was setting on Old Europe. The most powerful monarchies on the continent all fell as a result of the massive conflict, and Wilhelm was allowed to slink off into retirement. (Source)
He did have the decency to abdicate his throne before the end of the war, opening up room for the new Weimar Republic. It was the Weimar government that negotiated peace accords with the Allies.
In the Fourteen Points, Woodrow Wilson stated that the world was not jealous of "German greatness" (XIV.6) and welcomed a resurgent Germany. But when the dust settled and the war payments began, it was pretty clear that German greatness had ended…along with Old Europe.