What really grates on me is when normal people use it. I don`t mind actual nerds talk with nerdy catchphrases but I won’t stand for nerdy catchphrases entering normal language. Actually fail doesn’t bother me as much as ‘epic’ and ‘legendary’.
It’s a shortened version of the word “totally.” As in, “I totes love that new dress you just bought.”
Totes m’goats!
Given the increasingly frequent nouning of verbs, I don’t think “fail” or “epic fail” will ever disappear. We commonly hear now of “a big ask”, and I’ve seen “suggest” used for “suggestion”.
It goes the other way too, as you just demonstrated. Maybe in some version of Future English, there won’t be separate “nouns” or “verbs”, just words that can function as either depending on the context.
30 Rock did a great parody of this trend on the latest episode (where Liz gets the great jeans and Baldwin’s character backs some crazy libertarian candidate for Congress).
We may as well go back to just grunting and become the next trendsetters.
edit - oh, and those terms sound stupid. I’ve never liked them - which proves conclusively that they won’t last. Personally I’m trying to bring back ‘groovy’, so I have no patience for most neo-logisms.
I’m with you, dzero. Groovy needs to come back. And yes, I do base most of my decisions on what Marcia Brady would do/say. 
Sometimes when I’m looking at people failing miserably, I imagine them with the FAIL stamp over them, and laugh. I was walking past this group of guys at work, one of whom is just plain awful. He is bad at everything and everyone knows it. I saw him standing around and pictured him with a FAIL over his face, which cracked me so thoroughly up.
As for this “totes” shit, god help me if I ever use it.
Fail; yes. Amazingly versatile, like most good slang can be used seamlessly in a conversation or as a stand-alone interjection with plenty of opportunities for use.
Epic fail is a little too juvenile and I think will fade as its creating generation ages.
Why wouldn’t they survive? They’re perfectly cromulent terms.