After seven years of persecution and impoverishment at the hands of the Midianites, the Israelites cried out to God for help. In response to this plea, God sent them a prophet (unnamed) who reminded them of why they were being judged and punished –for worshipping pagan gods. Even Gideon’s father had succumbed to worshiping Baal.
The conversation between the angel of the Lord and Gideon is interesting. Although the angel of the Lord told Gideon the Lord was with him, Gideon knew that the Lord had abandoned the Israelites because they had turned to false worship. When told he was to save Israel, Gideon stated the obvious:
But Lord, Gideon asked, how can I save Israel? My clan is the weakest in Manasseh, and I am the least in my family? (Judges 6:15)
When told that the Lord would be with him, and understanding that he had found favour in the Lord’s eyes, he asked for a sign – evidence that it really was the Lord. That evidence was provided and Gideon cried out
Ah, Sovereign Lord! I have seen the angel of the Lord face to face! But the Lord said to him, Peace! Do not be afraid. You are not going to die” (Judges 6:22-23).
After this amazing event, Gideon did everything the Lord had commanded him to do and the Lord blessed him.
In answer to your question, “why did Gideon initially wonder why the Israelites were in such a bad state if he knew about idolatry being bad in Jehovah's eyes?” we must remember that the angel of the Lord said “The Lord is with you, mighty warrior”.
Gideon simply couldn’t understand why he would be chosen for such an important commission, to deliver Israel as Moses had been (Exodus 3:7-10). He was overwhelmed – until the miraculous sign gave him the courage to do as he was bid. His first task was to tear down his father’s altar to Baal and cut down the Asherah pole beside it. This proved that Gideon was prepared to risk all in order to obey the Lord God and to wipe out pagan and idolatrous worship.
It all goes to show that God uses weak and imperfect people in the outworking of his divine plans, and when they step out in faith, they are blessed.