Why no, Virginia, disks never fail. Diskettes are not an infallible distribution medium and disks will fail. The challenge for a software manufacturer is to minimize the probability that they will fail, and KOPY-RITE has had a lot of success in this endeavor. If the media is unable to retain an adequate data signal when it arrives in the field then a customer's drive might not be able to read it. The data might actually still be on the disk but cannot be read by the drive because the signal is too weak.
Diskettes are very sensitive to dust and other contaminates.
A dust particle, for example, looks like a boulder as it approaches the head of the disk drive. To help eliminate this problem diskettes contain a liner that is supposed to catch these contaminates and keep them from damaging the disk. It is impossible, however, to completely remove the possibility. If media is poorly manufactured it may contain a substantial amount of debris that might be caught by the liner during duplication, then later become dislodged and eventually scratch the disk. Or, a customers drive might reside in a dirty environment or receive infrequent use and subsequently have dust build-up on the drive heads.