Why do you think it has failed?
I rather agree with the quoted statement. I think that, if it is truly that simple fact which has failed, then it is because 'their goals' are in fact put upon them, not innately 'their goals'.* Students will of course not innately want to learn whatever they need to know to pass the exam. But they want to learn whatever they need to know to beat their friends in Fortnite.
I think more generally the problem is that pedagogy, as in _instruction_, is fundamentally at odds with _agency_ (which is what games excel at giving people). (Imagine playing a game that would explain to you how to play it at every step of the way. How fun would that be?) It's comes down to control. Who should have it: the teacher, or the student? No classroom setting would ever allow giving _all control_ over to students. Yet, that is what games do. And the wonders that it creates.. The control gives players a really _empowering_ feeling of agency and self-determination. Pedagogy, and instruction, is often more paternalistic / patronizing in its core, since it assumes "You can't do this, let me show you". Games say: "Let's see if you can do this!"
* - Education is a way of enforcing society's goals upon the individual (to create "citizens", ideally, but to create "workers", practically), and the individual adapts to it to the extent it helps him later in life, to the level he/she has aspirations and manages to forgo instant gratification.