Remember kids: Sucking at something is the first step at getting kinda good at something.
Failure teaches you many, many things. It teaches you how to handle adversity. It teaches you sportsmanship, character, and humility. It teaches you that not all of us are winners, and in the various games of life some people, through no faults of their own, are not going to 'win.' Failure also exposes your faults, and examining your failings will, if followed up, make you a better person.
Removing failure from education being a disaster is one of the few things that my mom and I agree on. Kids have to be allowed to fail, to fall flat on their ass and just not make it. Learning how to dust yourself off and get back up to try again is something every kid needs to know how to do, and do well if they want to be functional adults.