I'm not sure they've failed, but their lack of traction has to do with 3 things, I think.

1. Trying to do too many things. Too many features meands market confusion and cluttered interfaces. There is power in simplicity and purpose.

2. Twitter had already won. The early movers and adopters were already there and the network effect was in motion.

3. Using Adobe Air for their non-web interface. Twitter never worked for me until Twitterific, but air is just SLOW and annoying I personally couldn't abide.