The book explains that Dumbledore chose to immoblize Harry rather than defend himself:
Dumbledore has wordlessly immobilized Harry, and the second he had taken to perform his spell had cost him the chance of defending himself.
In any battle, sometimes the simplest move can prove the most valuable. In this case, Dumbledore chose to protect Harry, and that gave Draco enough of an opening to use a simple spell that Dumbledore would otherwise have countered.
Although the most powerful wand in existence, the Wand can be defeated. In The Tales of Beedle the Bard, Dumbledore explains that he beat the Elder Wand in his battle with Grindelwald. Mr. Ollivander also stated that the Wand would only work for a new master if he/she directly disarms, stuns or kills the previous master - this clearly implies that the master of the Wand can indeed be disarmed.
Rowling has also said that the Wand responds to power; given that it's somewhat sentient, the Wand may have chosen Draco over Dumbledore, because Dumbledore demonstrated that he chose protection over power, whereas Draco was obviously power-hungry.