Seriously not down with this idea as its most ardent supporters seem to like it.
And, until we get smaller divisions of things, I do not like this idea at all. To take an earlier example, you use a log for a bed... you fail... now I say how about you use the bits to make a bucket?
That kind of thing seems ok to me. Completely failing and turning an entire TREE into sawdust while trying to make a bed? this dwarf is dumber than a braindead rhesus macaque and should be given a pickand told to dig west until he breaches magma or the ocean. then walled up and forgotten. This stuff I am talking about has been implemented in small ways already. FAIL exists in DF, you folk are just looking too hard. I know some of the following have been mentioned, but...
Gems - if you don't get a large gem, you FAILed to cut that giant hunk of gem properly. you get a smaller one. because that's what you're left with.
Smelting - if you are of a higher skill you can get extra "goodies" out of some ores. otherwise, you're likely to FAIL
Melting - I think that melting items is tied to skill as well, in terms of how much you FAIL to recover. (if not, I'm cool with that one)
Digging - you took a huge amount of time, and you FAILed to actually extract anything from the rock. Anydwarf can dig, but if you have no skill, it can no longer be called [MINING], which is what you're actually trying to do (even if it's really the [DIGGER] tag in the raws.)
Weaving - I do believe there are ways to accidentally destroy the spiderweb you were supposed to be harvesting and FAIL to get it to the thread stage.
Fishing - you die. the fishes eated you. you FAIL at life.
Masonry - you followed the plan (and by this I mean the large swath of designated floor sections), but you followed it badly and cause a cave in. Sound familiar? (note: If this is/were tied to skill level, then that would be cool with me, because it is an obvious example of FAIL that makes sense, and hampers megaprojects, but in a realistic way.)
Animal Hauling - you FAILed at moving the critter to the new cage before it got smart and eated you, you coffin fodder you.
Archery/Melee - you miss. FAIL. duh. this happens all the time, but less as they train, one of the good places to actually have this happen.
Combat Sparring - you FAIL to miss, killing your best bud while sparring. Tantrum ensues.
Sumary: in my eyes, there is a simple test to find out if a "possible failure" is a good idea - don't look at it from the failure half, look at it as "percentages of win".
see if as long as every FAIL can contain at least some percentage of WIN (except for the combat-type examples, because you can fall back on armor/shield/dodge skill for your attempt at WIN), then I am ok with it. If it is a goddamed WIN/FAIL dichotomy, then your dumbass peasants and soapmakers are well and truly screwed and I do not at all endorse the idea.
That's what quality levels are about right now, and expanding that would be cool. If a bad barrel could hold food but not booze? and maybe not keep out bugs as well? Ok. that's cool. If making a barrel badly means you get NOTHING, and lose the resource they started with? then your dwarf is undwarvenly and is secretly a kobold, because a metal barrel fail should give you a lump of metal to try again with. and with a entire
tree to work with, there should be something left for your troubles.
[EDIT] I just realised I missed one: the failed mug.
howsabout "This cups not half empty... it's
full. that's all it holds"