Change default for update_status_on_fail

Default 'update_status_on_fail' to True so that instances do not get
stuck in the BUILD state.

When this option is set, instances that remain in BUILD for longer than
the datastore's configured 'usage_timeout' will be considered failed and
moved to the ERROR state.

Change-Id: I67e3ca8f652581cd504affedbe518472b0051ccd
Related-Bug: #1339826