The failure state (or lack thereof) is a tricky one and I think they can only be judged on a game by game basis.
Take Catan, for example. Nobody loses a game of Catan until a winner is decided. There are small victories and set-backs when reaching your goal but the fail state only happens once in the game.
In Prince of Persia (2008) you could argue that the lack of a failure state is more in line with Super Meat Boy. Rather than negating too much of the player progress, the idea was to let the player focus on the challenge they failed at rather than past challenges they've already accomplished.
Generally speaking, a number of designers feel it's necessary to move away from the 80's/90's decision to take large chunks of progress away from the player and throw in a game over state for failing a single challenge after accomplishing so much. It's a tight-rope that isn't possible to walk perfectly, I think.
There are arguments both ways, I think.
Game Over state pros: Re-challenging the player on past accomplishments will narrow out the possibilities of passing by pure fluke.
Game Over state cons: Redoing long segments of a game that a player has completed so that they can get back to the part they actually find tough is a needless waste of time.
Checkpoints were introduced for this very reason but even checkpoints have a habit of including portions of a game that are unnecessary to replay. When you look at PoP, it's not that the game lacks a fail state, it's just that the game doesn't make a song and dance about failing a challenge. The challenge still needs to be accomplished. It just doesn't waste the players' time by cutting to black and slapping Game Over on the screen, so the player can focus on what actually matters - the gameplay.
You don't die in Prince of Persia, but you don't pass the challenges by falling either. It's still a fail state. It's just not contextually framed as the protagonist dying.
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