From the weirder pages of Indian history, the hare-brained schemes of Muhammad bin Tughlaq (1325-1351), ruler of the Delhi Sultanate, are great examples of epic fails. His name is now a byword for governance silliness in India. "Tughlaq" is now the name of a modern Tamil political satire magazine which uses him as a motif.

http://en.wikipedia.org/wiki/Muh...

Tughlaq was committed to maintaining the Sultanate's expansion into the newly conquered provinces of peninsular India. To strengthen the sultanate's hold on its southern parts, Tughluq early in his reign moved the capital from Delhi to Devagiri, 700 miles (1500 km) south in the Deccan, renaming Devagiri as Daulatabad. The plan was conceived by the Emperor to rule from a strategic centrally located Capital. A Highway was built between Delhi and Devagiri to enable a smooth transfer. But Devagiri was ill equipped to host the offices and lacked the facilities wished by the Generals. And since this happened in summer, many people died because of inadequate water supply arrangements in Daulatabad. Without their comfortable mansions, the Ministers plotted to get the Capital shifted back to Delhi. The Mongol attack on the North added to the failures of this adventure. After only two years, the capital had to be shifted back again to Delhi, again at great loss, and it was said that Delhi was a ghost town for years after the move back. "When I entered Delhi, it was almost like a desert", wrote the famed North African
travel writer, Ibn Battuta.

and

Unique among his coinage was the "forced" token currency. It was modeled after the Chinese example, using brass or copper tokems, backed by the silver and gold kept in the treasury.

Tughluq had two scalable versions, issued in Delhi and Daulatabad. The currency was issued in the two different standards, undoubtedly to follow the local standards which preexisted in the North and in the South respectively. He engraved "He who obeys the Sultan obeys the compassionate" to fascinate people in accepting the new coinage. However, very few people exchanged their gold or silver coins for the new copper ones. Moreover, the tokens were easy to forge, which led to heavy losses, as Tughluq subsequently withdrew the forged currency by exchanging it for bullion coins. It is said that after the plan failed, there were heaps of copper coins lying around the royal offices for years.

In a way, the Taj Mahal is also an epic fail. It helped bankrupt the Mughal empire.

Other examples, which are successes in some narrow terms, but overall, are epic fails:

1. The Concorde
2. New Coke
3. Iridium: http://en.wikipedia.org/wiki/Iri...
4. The Segway
5. Webvan, of course...
6. The Titanic

I feel like I am missing some very obvious huge ones...