We develop a minimal theory for the recently observed metal-insulator transition (MIT) in two-dimensional (2D) moir\'e multilayer transition metal dichalcogenides (mTMD) using Coulomb disorder in the environment as the underlying mechanism. In particular, carrier scattering by random charged impurities leads to an effective 2D MIT approximately controlled by the Ioffe-Regel criterion, which is qualitatively consistent with the experiments. We find the necessary disorder to be around $5$-$10\times10^{10}$cm$^{-2}$ random charged impurities in order to quantitatively explain much, but not all, of the observed MIT phenomenology as reported by two different experimental groups. Our estimate is consistent with the known disorder content in TMDs.
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