Failure in this context likely means "is not attracting large swathes of Facebook users" though frankly I think that's but one measure of the success of a social networking website.
Well, a social network that is used by only a small fraction of one's friends and potential friends is not very useful.
Not necessarily. If you can make a federated social network that can interoperate with the networks people already use, people can migrate to it incrementally.
I suppose it is when the narrative is the next Facebook killer which the media fostered and perpetuated creating some unreasonable expectation for their team.