Whenever an officer is red, you will have serious issues like you mentioned, not including the damage to the FLAK incurred.
The idea is to simulate the havoc of being attacked and losing your command staff, and their ability in getting things done.
In your situation, Dieter was hurt, this simulated your total watch crew being killed/wounded because they could not give you a range/bearing of the plane anymore.
Example, I was depth charged, lost Benno the hydrophone guy, the hydrophone was badly damaged.
I would ask for sound contacts, and he gave me false readings. Going to the station, I could sit there but the needle would not move. I use voice commands, so I can still order my guys even though they are red, can't click on them. It's a cheat, but their readings are bad anyway!
Your situation sounds normal to me.
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