From an old post of mine (back in 2008):
I think that Hooker came across the river, rode to Chancellorsville, and felt like a man who'd fallen into a coal chute. Everything that was certain at Noon was unsure at 3 PM. For a while there was a complete information blackout -- no messages at all -- from his HQ. Then messages began to arrive in fits and starts, out of order. Union communication discipline is horrendous. Messages do not contain references to identify what they are referring to (Like "received your message of 1 PM" or "the rebel column in my 1:30 PM message is now ..." or they contain no time notation at all.) Even when messages do arrive, without a matrix to put them in they are often more confusing then helpful.
Now the "best" way to resolve all this was for Hooker to continue the drive, get out of The Wilderness, and see for himself what was what. That would also re-establish more direct communications with his HQ and open up US Ford. But this is also perhaps the most dangerous thing Hooker could do if the situation is not what he thinks it is.
Although there aren't many messages getting through from HQ, some of them (particularly the balloon reports) speak of Confederate troops moving west (i.e., towards Hooker) Some seem to imply reinforcements for the rebels are arriving. Some make little or no sense at all.
So there's Hooker, sitting in the woods at Chancellorsville, suddenly blinded. What does all this mean? What should he do?
If Lee is retreating west (why the heck west instead of south?) towards Hooker, then Hooker might stay where he is until Sedgwick crosses the river, then hit Lee in the flank while Sedgwick hits his rear. Sounds good, huh?
If Lee is coming to attack Hooker, then Hooker can defend and hold him off until Sedgwick crosses and hits him in the rear. Then they can try to crush lee between them. Sounds good as well.
If Lee is actually moving south, he might get off unscathed, but the AoP will be across the river in impressive and nearly bloodless fashion. Hooker can quickly pursue, on short supply lines. Good for morale, at least, and not to be despised after the bloodbath at Fredericksburg in December and the fiasco of the "Mud March".
But if Lee has been reinforced (maybe one of Longstreet's divisions is suddenly arriving from Suffolk, or unknown reinforcements by RR through Richmond), then maybe Lee is about to launch one of those sledgehammer blows at the head of Hooker's columns as they emerge from The Wilderness. In that case, plunging ahead through this stuff might be exactly the wrong thing to do. Meade, over on the river road, might be particularly vulnerable, or the Corps on the right if the Confederates got around their flank. The stiffening Confederate resistance to the front might be the first sign of that.
Hooker has to guess, and he has to guess right then and there, in this sudden isolation. He decides to play it a little safe. He stops the forward movement. He calls the leading elements back, and he orders them to entrench around Chancellorsville. If Lee wants to attack him there, dug in, with some of the little clear ground in The Wilderness, Hooker will bleed him all he can before coming out after him. If Lee doesn't, he can advance tomorrow when everything is in better order.
This is when men like Couch and Meade blow up. They're further forward. They've been marching through this tunnel-like growth for a couple of days, anxious as soldiers are when they can't see around them well. They aren't out of this dank woods yet, but they can see the way out in another couple of hours advance. They're eager and psyched up one moment; angry and sullen the next. They pull back as ordered.
This is the mistake everything else pivots on. There were no reinforcements, but Lee was coming to attack anyway. He and Jackson work their magic, XI Corps gets flanked, events start rolling downhill for Hooker, and then maybe he gets stunned into near insensibility by that cannonball.
From here we see the inactivity while Lee turns on Sedgwick, and the decision to retreat when Lee is coming back. Hooker, once he started moving backwards, hit by many sudden blows, again stepped back. Facing Lee, facing Jackson, facing Stuart, facing the ANV, that was exactly the wrong thing to do.
That, really, is what all the criticism of Hooker was about. Many commanders, thrust into the same situation, might have done something similar. It isn't about military technical knowledge or professionalism; it isn't about skill in execution. It isn't about courage -- certainly not the kind of courage it takes to go where the bullets are flying, because Hooker had that in abundance. Schofield doesn't look much different at Spring Hill and Franklin when Hood comes down on him, but Schofield had better luck when Hood smashed his own army in the assault at Franklin.
IMHO, in Hooker's position, a Lee, a Jackson, a Grant, a Sheridan, a Thomas might have continued the advance. It fits their style and personality. A Bragg might have continued the advance out of sheer determination: he rarely changed a plan once made. Meade and Sherman might have continued the advance a bit slower than the others, or pulled back; a Hood undoubtedly would have pushed the advance to the utmost (but I can also picture him falling into a trap the easiest). I can't say I feel strongly what any of the other high commanders of the war might have done, but I can see many of them thinking like Hooker did that fateful afternoon.
OTOH, Meade and Sherman were not retreaters. They were stubborn fighters. I can't picture them falling back across the river at the end, as Hooker did. I can see either being not-quite-aggressive-enough when Lee turns on Sedgwick.