Actually I don't believe that Diaspora failed. The fact that I'm using it on a daily basis, and not using Facebook, is pretty much a win as far as I'm concerned. Diaspora still has some way to go, but it's usable.
Certainly, success is subjective but I think the expectations for Diaspora was to be a legit alternative to Facebook and now G+. And while it is an alternative, it's not popular enough for most people to switch over. Furthermore, Diaspora got widely criticized with regards to their funding and subsequent releases... specifically people expecting much more for the amount of investment.