The failure spoken of is clearly the breach of the promise (and associated changing of literature) to back each by one USD.

However I'm very interested in the idea of shorting a "stable"coin. Who would possibly enter into this contract for an asset that has an upside of zero and a (potential, long-term, depending on your bearishness) downside of 100%?

In any case, with the strong likelihood Tether themselves are effectively shorting it by selling it unsecured by any real assets it would be a tough market to get in on.