I'd like to see some failures happen, just for the sake of variety/reality, but I think there could be a balance achieved by limiting the severity of failure, and the potential of failure to certain tasks/certain materials.
There might be a switch you could turn on in the Raws, if you wanted to make failure an option for certain difficult processes, like when dwarfs are working with say patterned steel, or whatever.
The game could still "ship" with everything turned off, though, so you'd have to actually turn things on yourself, if you wanted failures.
That, on a personal note, would help a *lot* towards balancing out some of the more powerful materials I want to mod in.
As far as mining goes, it might be made in such a way that the crude mining itself never fails (they're dwarfs, afterall), but that the smoothing process might, potentially causing (generally minor, and certainly less than fatal) injuries.
Failure need not be total, either. Failure might very occasionally mean a-relatively minor-disaster where one of your Miners got, say, a broken limb, or you had to use an extra unit of fuel to forge that super-powerful axe, but it also might just double or triple the time needed to perform a task (which would be the worst a failure should ever do, when our dwarfs are performing "everyday" tasks.)
It might be applied to the above Mining example, costing you twice the time to get through a patch of stone, but you'd eventually get through it.
In this way, it would be more of an annoyance (while being more realistic), and less of a potentially fortress-stomping gamble.
Failure could also be *extremely* useful, when the Magic Arc gets here, considering that failure would work both ways, and that demon/goblin/kobold wizards could be quite nasty, especially if everything they ever set out to do works perfectly, every time.