Slate just ran an interesting article on the origins and definitions of the word 'fail' as we use it in the internet world, and now the real world. MUST READ!
Read the full artilce here: http://www.slate.com/id/2202262/?GT1=38001
Here's some highlights-
What's with all the failing lately? Why fail instead of failure? Why FAIL instead of fail? And why, for that matter, does it have to be "epic"?
It's nearly impossible to pinpoint the first reference, given how common the verb fail is, but online commenters suggest it started with a 1998 Neo Geo arcade game called Blazing Star. (References to the fail meme go as far back as 2003.) Of all the game's obvious draws—among them fast-paced action, disco music, and anime-style cut scenes—its staying power comes from its wonderfully terrible Japanese-to-English translations. If you beat a level, the screen flashes with the words: "You beat it! Your skill is great!" If you lose, you are mocked: "You fail it! Your skill is not enough! See you next time! Bye bye!"
Normally, this sort of game would vanish into the cultural ether. But in the lulz-obsessed echo chamber of online message boards—lulz being the questionable pleasure of hurting someone's feelings on the Web—"You fail it" became the shorthand way to gloat about any humiliation, major or minor. "It" could be anything, from getting a joke to executing a basic mental task. For example, if you told me, "Hey, I liked your article in Salon today," I could say, "You fail it." Convention dictates that I could also add, in parentheses, "(it being reading the titles of publications)." The phrase was soon shortened to fail—or, thanks to the caps-is-always-funnier school of Web writing, FAIL. People started pasting the word in block letters over photos of shameful screw-ups, and a meme was born.
The highest form of fail—the epic fail—involves not just catastrophic failure but hubris as well. Not just coming in second in a bike race but doing so because you fell off your bike after prematurely raising your arms in victory. Totaling your pickup not because the brakes failed but because you were trying to ride on the windshield. Not just destroying your fish tank but doing it while trying to film yourself lifting weights.
Why has fail become so popular? It may simply be that people are thrilled to finally have a way to express their schadenfreude out loud. Schadenfreude, after all, is what you feel when someone else executes a fail. But the fail meme also changes our experience of schadenfreude. What was once a quiet pleasure-taking is now a public—and competitive—sport.
It wouldn't be the first word to owe its ascendance to the Internet. The exclamation w00t—an interjection expressing joy—gained mainstream recognition when Merriam-Webster crowned it Word of the Year in 2007. The phrase pwned, a perversion of owned used by online gamers, made it into an episode of South Park—not quite the OED but still authoritative—and enjoys broad ironic usage. And of course, Google is no longer just a noun.
Unlike those words, though, fail has the luxury of pre-existing forms. It already exists as a noun in the phrase "without fail." It's therefore likely to gain quicker entry into most people's lexicon than, say, a word that includes digits.
In other words, fail will win.