[Lord_of_the_morning]

House Greyjoy should have taken Robb's offer to ally with him and move south. If you end up winning in the south, the Starks and Tully's will not care if the realm is torn apart. However, if the south wins, they will want a united kingdom. And holding the North, the majority of which is inland, is not an easy task, as Theon found out. An attack on the scantly protected Lannister lands would have provided a lot of easy looting, and in hindsight might have made Tywin move west even faster than Robb's strike on land, which would have left King's Landing unguarded.

Balon might say that it was Robb's choice of wording in the letter that set him off, but he'd been gathering his forces for a while and had already planned his strike by the time Theon got there. Another bad move after his first rebellion against the throne. If he wanted to break off, doing it during or right after Robert's winning of the Throne would be the best time, and partly legitimate if they considered Robert to be usupring the Targaeryns. But to wait a few years and rebel when the Realm was united under Robert was another mistake.

Too add to that now, after they've pissed of the North, they go and attack the Tyrells, the worst place to attack next. If they'ld attacked the Lannisters, the Tyrells might have been slow to respond, and they have the only fleet that can match the Iron Fleet. So now they've pissed off everyone.