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Not a failure. The whole point of R&D before doing a genuine payload is to remove this sort of issue. While the association of the company with Musk is truly crappy, this explosion is genuinely useful.
If this project were European or under a different administration, I would feel the same.
It is usefull but the trouble is that they should be much and much more certain about their designs. Let's say they want 99.99% reliability for real payload then they should by now be at 99.9% . If they want to do it by trail and error they would need to do a lot trials to show that they actually achieved that reliability. Otherwise the next one is still just as likely to explode. I guess what I'm trying to say is that you can't get there by trial and error.