Essentially, the "Insufficent resources" message meant that you were over capacity should one host fail.
Example: You have one host running at 50% CPU, and another running at 60%. This is 110% total, and therefore if one host dies, there are not sufficient resources available to run all VM's at their current service levels.
As you add hosts to the cluster you can boost your average utilization (2 hosts = 50%, 3 hosts = 66%, etc).