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Sol Lipman just sold another startup, RallyUp (http://www.getupandrally.com/), to AOL, and David Beach took a position at eBay.
May be the fair statement would be - "Failed in one startup doesn't mean you failed as an entrepreneur. There is still hope that you can make the next one successful."
The public video cam space (ie not Skype/private messaging and not adult stuff) has never gone mainstream despite many people trying hard - and no matter what you might do the fundamental proposition is just not attractive to most people.
Facebook has had a similar feature - most people don't even know it. Seesmic video (the original product there) is not worked on. Chat Roulette is really a meme/joke and no where near a proven business. TinyChat has video but it's still semi-private and certainly not mainstream.
I actually thought with the front facing camera and FaceTime on iPhone we'd see a shift but it still doesn't seem to be happening. Just like next year is the year for video calls, it still hasn't happened.
You still have some traffic