Created cliques
The Sorting Hat eliminated the students’ ability to pick and choose their friends for themselves. Most students were only friends with those within their houses. Rarely are there inter-house friendships. Being in a house made the students feel they had to be friends with the people who in theory were exactly like them. The Sorting Hat placed these kids in a class system deeming Gryffindors the “populars,” Ravenclaws the “nerds,” Hufflepuffs the “nice kids” or “outcasts” and Slytherins the ones no one really likes. The Sorting Hat caused separation within the student body not unity.
It enforced favoritism
The Sorting Hat was able to dictate if you were going to be the favorite or not.There was no doubt favoritism towards the Gryffindors. Mcgonagall bent the rules for Harry by giving him a broom in his first year, and Dumbledore gave points to the Trio and Neville for breaking the rules (which was clearly so Slytherin wouldn't win the house cup). Snape also favored the Slytherins over the other houses. Teachers favorited their own houses and treated the children according to the stereotypes of their house.
It caused self-fulfilling prophecy
By telling these 11-year-old students where they belonged these kids become their stereotype. Only a handful of characters broke from their house stereotypes. The Gryffindors became the heroes, the Slytherins the villains, the Ravenclaws were bookworms and the Hufflepuffs stayed in the background of things. It didn’t matter if you were the nicest person if you seemed ambitious and got sorted into Slytherin you were probably going to have a dark mark tattooed onto your arm by seventh year.
It created enemies
Sorting these 11 years olds didn’t just give them a close group of friends but it created enemies. It seemed that the rivalry between Gryffindor and Slytherin, frequently shown in the series, was inevitable no matter how close you were before Hogwarts (Severus Snape and Lily Potter) or if you were immediate family (Sirius and Regulus). The Hat had the power to create enemies and frequently did in the story. That is what really caused the war. At the end, the war wasn’t even about blood status but really house prejudice. It was more Gryffindor vs. Slytherin than good vs. evil.
It made Voldemort who he was
The Sorting Hat had the chance to stop the war too. If the Sorting Hat can really see what is in our minds than it should have known not to put Tom Riddle (Voldemort if you didn’t already know that) in Slytherin since he would have been easily influenced by purebloods and their views on muggles, muggle borns, etc. The Hat put everyone who would most likely end up doing or being influenced by dark magic or Voldemort all in one house. No one can tell me that Sorting Hat didn’t know Bellatrix was crazy when she got sorted!
