Having owned 32X, Saturn, N64, and Dreamcast, I guess I'm a bit of a failed system connoiseur...
However, I don't really consider the N64 a failed system because it sold pretty well. That said, the Dreamcast is my favorite failed system. I remember counting down the days until 9/9/99 (launch date). It had so much going for it, and had a great library of unique and original games, yet it somehow still fell short. I guess everyone was holding out for the PS2. Oh well. On the bright side, at least everyone gets to enjoy Sega's games now, no matter your flavor of console.