I remember reading an article in Retro Gamer about ET, and it was pretty fair to all accounts about the whole thing. They were , however, very scathing about the game, as it was an absolute bug ridden mess, with little or no playability, gameplay, or...well..anything to do really. Bear in mind the Atari 2600 also had some great games out at the time like River Raid and Pitfall, and it really was a mess. It was literally riding on the coattails of the film and didn't offer anything as such as a game.
Also, whilst they produced a lot of copies, and sold a few, many were returned, and at one point, the games retail price of $49.99 was discounted to under $1 in some stores. Ataro also spent like $125million dollars on it's production and licence, without even having the slightest of plans, just "Get the licence, make any old shitty game, parent's will buy it".
All in all, it was a terrible business decision that along with Pacman, nearly killed off the whole fledgling video games market before it even got going. Stores refused to even stock video game systems and many considered the craze *over*.
I think that does classify as a pretty definitive *failure* as a game :P Both critical and commercial losses, along with causing nearly a whole industry to fall apart
(on a side note, I actually think the game is kinda...*fun* in a turdy "omfg it's so bad" kinda way
)