Thanks to the massive mainstream publicity they received around launch time as being a "Google Killer" they were able to expose their site to millions (yes, millions) and lock in an audience.
Sure, the numbers have dropped off since then. So what?
I'm tired of hearing the word "fail" bandied about so self-righteously as if Cuil should be ashamed of not beating Google at their own game. Like that's some kind of minor challenge. Yes, their implementation is lacking. Yes they have not taken advantage of the time since launch to work out its weaknesses. But their PR department certainly can't be accused of failure and I wouldn't be surprised if they're making some decent ad revenue off that kind of traffic.
It would be more fair - to them and to us - to call them a mixed success. One of the problems of the word 'fail' used so liberally in these contexts is that it is a blanket refusal to look at the balance of someone's achievements in its context. Used this way, it's actually a bigoted term and has the very problematic side-effect of making us less willing to take a balanced perspective on our own achievements in addition to those of the people we label with it.