It was a failure because it was an expensive program that produced nothing usable until after Germany no longer had the time or spare production capacity to produce a fleet of heavy bombers. It should not take four or five years, with wartime experience, to produce a usable warplane. The B-17 was only a little older, true, but in terms of wartime experience the Americans were far behind the Germans, yet the 1942 E and F models were entirely useable. The British Halifax was usable out the gate and the Manchester failed (for the same basic reason as the He177s) until Avro and Rolls-Royce wisely stopped trying to make the overly complex Vultures work and just went with four Merlins to produce the immediately usable Lancaster. Had Heinkel switched to a basic four engine He277 early on it would have been a great bomber, no doubt, but they persisted with trying to force a very difficult engine arrangement to work until it was too late for the resulting aircraft to be significantly useful.
The Do217 and Ju188 programs were much more successful in producing a usable bomber in a useful timeframe and for a reasonable cost.
I seem to recall it was a customer requirement that kept the He177 saddled with those engines. If so, one can hardly blame Hienkel for the failure. The Mitsubishi G4M 'Betty' suffered a similar fate, the customer insisted on two engines only when the manufacturer kept telling them they really needed four to get a usable warplane with the range being demanded. As it is, Mitsubishi had to sacrifice all protection in order to get the range requested on a twin engined aircraft.
