Why challenge British sea power when it already helps Germany?

Was the Kaiser's decision to challenge British naval supremacy while Britain was effectively friendly an epic blunder?

Yes; Germany gave up the benefit of free access to the world's strongest friendly sea power and paid to turn it into a rival.

The Kaiser's decision to challenge British naval supremacy is presented as a strong candidate for an epic strategic blunder. Germany already benefited from a relationship with the world's most powerful navy without paying to maintain it. A land-power partnership could have let Germany concentrate on the army while British sea power covered shared interests. Starting a construction contest converted a useful alignment into rivalry and imposed major costs on German strategy and diplomacy.