So do you get my question? It's not, "Why has it failed in the past?" It's, "Human weakness aside, is there anything genuinely wrong with it?" But I think that lack of personal incentive probably holds the answer...
It never really was put into practice. Capitalists push the myth that the Soviet Union was "socialism' or "communism" when the central principle of people holding the power of the state was not a reality. There were concentrations of power, it was run by an elite. If the power had actually rested in the hands of the common man then it would have been ideal.
As far as incentives, there is no reason that people can't be given extra awards for service above and beyond the norm. You raise the standard of living for everyone when a safety net is provided for people when private power fails to provide critical things. This is what current system apologists fail to realize, there is such thing as no jobs or poor paying jobs that simply do not fill the peoples' needs. Meanwhile (and this is what people miss also) the rich have these safety nets for themselves, YES government programs and policies that subsidize them and socialize their risks. The general public is not supposed to understand that public money is used by private power in contradiction to the philosophy they sell the general public.
And what is missed is that Capitalism actually failed decades ago. The Great Depression made it clear where it was headed. Now we have "State-Capitalism" in which massive government spending keeps the economy afloat and massively subsidizes private industry with money for R&D and purchases. It could be called socialism for the rich. The Military Industrial Complex is a massive part of this. In fact military spending is preferred since it hides the socialism from the average person who apparently doesn't put it all together. The fact is from the earliest days of America, spending of this sort kept the economy running. "Public subsidy to high tech industry is masked as "defense spending"". "The public pays the costs and the rich get the benefit--markets for the poor and plenty of state protection for the rich." http://archive.8m.net/chomsky.htm