I don't think that going f2p is a sign of failure, so much as it's indicative of the current state of the market. Games like wow and ffxi have very strong and loyal player-bases, so they'll always be profitable from subscriptions. When new games come out, f2p has been an appealing option in the past few years because it's a business strategy to grab a lot of players over a short period of time and perhaps cash-in on microtransactions.
I think the reason F2P is seen as a failure is simply the ideals of the MMO: a continuous, living world, where you and your character exist separately. MMOs aspire to live for years because players WANT to be that invested in their characters. After all, you're creating an entire fantastical world... why shouldn't there be enough in it to delight players for years?
To some extent, I think it's true that this is a misguided or at least overzealous dream, but we definitely have not yet seen a game that even comes close to pushing the boundaries of that ideal.