"Don", the guy who ran away from combat, has been over-compensating since 1950. He was in control of the situation until he got cocky (in more meanings than one) and lost sight.
Ted and Peggy are better than Don, who's passed his prime, and he's threatened by both of them. I guarantee you this isn't something Don was thinking of when he suggested that SCDP and CGC merge. All he was thinking about was doubling the size of the firm and getting Chevy. The combination came at a price: the combination of talent and this is where Don is coming up short more often.
It was obvious last season as well. Ginsberg was a better creative and everyone knew it, even Don, but he's such a character that it kept him at bay. Also, Peggy hadn't broken off and come into her own yet even though she was on the cusp of it. With this season she has. And Ted is the Ken to Don's Pete. Don has serious, level-headed competition from within that he can't just dismiss or leave in a cab.
Ted surpasses Don in running creative, so he resorts to a drinking match, but getting Ted drunk doesn't change the facts that Ted looks to be better at his job than Don. And Ted's a pilot. Don sees that as a blow to his Alpha-ness.
This is why Don was so controlling with Sylvia. She was the one thing he could control. "At last, something you can truly own."
In a way, Don is even worse than Herb. With Herb, you know what he's about right up front and he knows exactly what he is. Don tries to hide what he is, change the conversation, or make it look like something else.
As soon as Don lost Sylvia, he turned his eyes back to Megan but only his eyes. He sees her but doesn't hear anything she has to say or wants to do. He's threatened by that too.