Slapping +/- 5% on top of a prediction that is systematically off by ~5% isn't "in the margin of error", it's just simply off. For one prediction, two predictions, no problem. They fall somewhere in this range with probability distribution (usually a Bell curve around the mean). But for hundreds, if not thousands, of polls to be so systematically off, it is not "within the margin of error" or a statistical fluke. If it was, you would expect a normal distribution around the mean of the polls. The mean was completely off.
Put simply, it was sampling bias. Pollsters screwed up. They either sampled the wrong voters, the wrong areas, mispredicted who would turn out, or voters did not accurately report who they planned to vote for. Garbage in, garbage out.
You can try to correct for sampling bias, but if you are blind to it, as your comment pushes more people to be, then you will fail.
Right, but the job of 538 is exactly to deal with that, and they do take into account the fact that errors are correlated, so if one poll is off, chances are they all are. That's why their predictions are fairly conservative. They gave Florida a 1/3 chance for Trump and 1/10 for the presidency. Both those numbers make sense.
Now you can argue that there's little utility if the error bars are so big, and you may have a point. The bigger issue here is that modern elections have been extremely close, and unfortunately we cannot get polling accurate enough.
Put simply, it was sampling bias. Pollsters screwed up. They either sampled the wrong voters, the wrong areas, mispredicted who would turn out, or voters did not accurately report who they planned to vote for. Garbage in, garbage out.
You can try to correct for sampling bias, but if you are blind to it, as your comment pushes more people to be, then you will fail.