Though Mu appeared to a peaceful colony of Spain, in reality the power of it's Priest-Kings was only held in check by certain ancient ceramic seals in possession of the Spanish. When the American inadvertently broke these, the Priest-Kings were free to unleash their power and reveal their true, inhuman nature. Not only were these reptilian humanoids adepts at amazing powers of the mind, the heirs to ancient Agharta, but they were also in possession of machinery older than all of human civilization that could create monsters.
Of course, Mu hadn't had to wage a war since men were armed with bronze. The U.S. forces were able to hold on, if barely. It was only when the first of the clandestine draftees from the ranks of mentalists, spiritualists, and Theosophists arrived that the Americans began to turn the tide.