there is usually only ever one reason as to why this would be a bad idea to use in a game, going back to some of "extra credits" quotes, there is usually a reward system built into games and this is what makes them playable, imagine finishing a game to find out all that you have done within that game amounts to nothing and that you were on the losing side all along, some of us might get angry, the rest of the game could have been good but a bad ending can completely destroy even the best of stories.
left 4 dead tried this during the first chapter of the game, remember how you felt when all of the survivors just gotten to the chopper and are safe and sound, like you had managed to achieve something worthwhile?
the original plan of that scene was to have the chopper pilot say that he had been bitten and wasn't feeling too 'funky fresh',the developers took this out because when you finished the level and heard about the pilot being bitten, there was no sense of accomplishment, no reward so to speak.
an example where this was a bit overused is Dead Space, you went around the ship fixing one thing after before being told that something else was completely fried, this follows the idea of the "Skinner's box" but only yields rewards through the RPG system of credits and upgrade system, remember how you felt when time after time you were told to fix something else for the umpteenth time? got a bit old really quickly didn't it, but that had a compelling storyline to carry it.
i'm not saying that either of these games are bad, i myself have already pre-ordered "dead space 2" and play "left 4 dead 1/2" with my friends whenever i get the chance because the reward is that massive sense of accomplishment. there are certain cases where the idea of being on the losing side has worked, but it is very rare.