Did Germany understand how capable the Swordfish was, and why was it so hard to replace?
Short answerThe aircraft's real strength was its specialized torpedo-delivery method, which was difficult to reproduce in a more advanced replacement design.
NotesThe Swordfish looked old, which encouraged observers to underestimate it, but its replacement had to reproduce a demanding set of capabilities. Other nations' aerial torpedoes tended to enter the water more steeply, even when fitted with temporary fins. British tension-wire and fin arrangements let the torpedo belly-flop into the water and begin a much shallower run. That delivery geometry made the Swordfish especially useful against ships in confined harbours such as Taranto. The drag of biplane construction also made the aircraft a stable and accurate improvised dive bomber, adding another use to an apparently obsolete airframe.