I was playing a tabletop game once, and one of the NPCs in our group carried a .357 revolver that he kept unloaded because revolvers don't have a safety switch on it, and we were playing a game where we were on a spaceship, so it would have been bad if it went off and put on hole in the ship. Anyway, my friend, myself, and this NPC were going on a mission and ended up running into some trouble. NPC drops his gun, and one of the enemies pick it up and point it at my friend (the gun hadn't been shot at this point) and my friend, thinking it was still unloaded, didn't move. Yeah...he got shot in the chest from about 5 feet away. XD
My friend also had a very hard time beating Brink...on Easy, when I was merrily strolling through the game on Hard, and he's actually a better technical shooter than I am in games. Probably why I do so much better than him in Brink, actually.
I've had a couple of fail moments in games, but not the monumental super epic fails that my friend has. XD
My friend and I played 1v1 on Bioshock 2. We played three and a half matches. The first match we didn't count because I got the Big Daddy suit, which is really unfair if you're against only one person. I beat him the other two matches by quite a bit, and he ragequit the last match halfway through and refused to talk to me for the rest of the day. This was last year, so he was 20 at the time. When I asked him the next day what was up, he simply responded, "I wanted to win..."
Oh, there are so many others it's hard to think of them all. Perhaps I'll be back and post some more later.
I do remember one of my fails now that I think about it.
I was playing Medal of Honor: Frontline, on the submarine level. I unloaded three clips from my .45 into a Nazi's head at point blank range, and he didn't die. I don't know what the deal was, but it frustrated me enough to ragequit. It was the only time I've ever ragequit, now that I think about it.