Motivation: $T_{\mathbb P^2}$ isn't an extension of line bundles
Here's a trick to show that the tangent bundle $T$ of $\mathbb P^2$ is not an extension of line bundles. If it were, we would have a short exact sequence $$\def\O{\mathcal O} 0\to \O(a)\to T\to \O(b)\to 0 $$ for some integers $a$ and $b$. Then we can compute the total Chern class $$\begin{align*} c(T)& =c(\O(a))\cdot c(\O(b)) \\ &= (1+aH)(1+bH) \\ &= 1+(a+b)H+abH^2, \end{align*}$$
where $H=c_1(\O(1))$ is the class of a hyperplane.
On the other hand, we have the Euler sequence $$ 0\to \O\to \O(1)^3\to T\to 0 $$ which tells us that $$\begin{align*} c(T)&=c(T)\cdot c(\O)=c(\O(1)^3)\\ &=c(\O(1))^3= 1+3H+3H^2. \end{align*}$$
Now observe that there do not exist integers $a$ and $b$ so that $a+b=ab=3$, so $T$ cannot be an extension of line bundles.
The Question
More generally, whenever we have an extension of vector bundles $0\to L\to E\to M\to 0$, we have $c(E)=c(L)\cdot c(M)$. So to show that $E$ has no sub-bundles (or equivalently, no quotient bundles), it suffices to show that $c(E)$ doesn't factor. The question is whether the converse is true:
Suppose $E$ is a rank $r$ vector bundle on a (smooth quasi-projective) scheme (or manifold) $X$ so that $c(E)=c(L)c(M)$ for vector bundles $L$ and $M$ of rank $i$ and $r-i$, respctively. Must $E$ have a sub-bundle or rank $i$ or $r-i$?
Remark 1: The phrasing is a bit strange compared to the natural-sounding "If the total Chern class of a vector bundle factors, does it have a sub-bundle?" The point is that knowing the rank of $E$ is very important. We showed that $T_{\mathbb P^2}$ has no sub-bundles, but $O(1)^3$ has the same total Chern class and clearly has lots of sub-bundles.
Remark 2: Does either $L$ or $M$ have to be a sub-bundle of $E$? NO! For example, on $\mathbb P^1$, we have that $$ c(\O(1)\oplus \O(-1)) = (1+H)(1-H)=1 = c(\O)c(\O) $$ but $\O(1)\oplus \O(-1)$ doesn't have a sub-bundle isomorphic to $\O$ (because it has no non-vanishing sections).
Remark 3: What is the answer in the case $X=\mathbb P^n$?