What is/was this “failure, and where did it come from?
Looking into my sources (Artists’ Books: A Critical Anthology and Sourcebook, and The Century of Artists’ Books) I wonder if the failure is there, implicit in those discussions, or if I injected it in. Here is the slightly elegaic, slightly hopeful, author’s note preceding Lucy Lippard’s two essays in Artists’ Books:
The following two articles were written in late 1976 and in summer, 1983. The first is drenched in the enthusiasm that engendered Printed Matter that same year. The second reflects a certain disillusionment with the direction artists’ books took in the interim. The process continues, and were I writing yet another piece today (the end of 1984), I might produce yet another view, affected by the fact that I’m now making collaborative artists’ books myself.
The production of and market for artists’ books continue to grow and this is a good indication of the form’s ongoing vitality. As the second article suggests. I am still more interested in those books that sidestep internal vicissitudes in favor of fantasies and realities that reach further out. These are still plentiful and some of my favorites have emerged since both these articles were written. I could add an equally impressive new list of works with social and/or political content. Printed Matter and its colleagues struggle on against economic adversity and artworld trends. The audience grows as libraries become more receptive. We await some distribution genius, or godmother, to inflame the hearts of a broader public with the burning desire to own artists’ books. Until then, harsher criticism and deeper knowledge of the genre will have to suffice. 
All in all that note is pretty hopeful. Looking into her second essay, the “disillusioned” one, we see the first paragraph:
The artists’ book is/was a great idea whose time has either not come, or come and gone. As a longtime supporter of and proselytizer for the genre (and co-founder of Printed Matter, the major nonprofit distributor), it pains me to say this. But all is not lost, just misplaced. 
Critical, but still hopeful. On the next page though, there are two quotes from “practitioner” Mike Glier:
the next step for artists’ book was “to become politically effective and to communicate to a diverse audience.” A few years and no giant step later, Glier is saying, “We’re past the careful nurturing stage and into do or die competition with mass culture. If artists’ books remain a novelty in the art world, they are a failure.” 
Obviously, in those terms, the artists’ book (and I assume he’s talking about the democratic (mass-produced, affordable) artists’ book as the entire genre) did fail. But things like art (not democracy) are never “do or die.” There can always be a “return.” In fact, one might say that these “returns” continuously fuel the discourse/practice. The failure doesn’t really exist—not in actual events, not explicitly or implicitly within the main thrust of the discourse—and we can see that the “return” here is a re-examination of an idea that has never gone away:
Despite their general lack of visible effectiveness, [artists’ books] are part of a significant subcurrent beneath the artworld mainstream that threatens to introduce blood, sweat, and tears to the flow of liquitex, bronze, and bubbly. 
1. Lucy Lippard, “Author’s Note,” Artists’ Books: A Critical Anthology and Sourcebook, ed. Joan Lyons (Rochester: Visual Studies Workshop Press, 1985), 44.
2. Lucy Lippard, “Conspicuous Consumption: New Artists’ Books,” Artists’ Books: A Critical Anthology and Sourcebook, ed. Joan Lyons (Rochester: Visual Studies Workshop Press, 1985), 49.
3. Ibid., 50.
4. Ibid., 56.