As with any kind of metering tool, you have to know how to read the output.
'Fail''s are discrete events which are of interest when learning a raid encounter e.g. not moving to avoid damage. They have a clearly defined set of conditions which trigger them (usually taking damage from something). That's all they are.
Fail's are not a measure of player ability. They do not indicate definitively that you as a player have failed in any way.
Understanding how/why 'fails' occur can be useful, but this info won't kill the boss for you.
Outputting the messages into a special channel reserved for fail messages is recommended (same for dmg/heal/whatever meters).