Has a Project failed if the benefits are not realised?

Not at all. There is a big misunderstanding I have debated inside the PMI and today some things have been changed into documenation like PMBOK (not because of me. Other people said the same I said). Benefits are not achieved because the project. Benefits are achieved because the product/service/result created by the project. That is the solution to be created to address business problem (needs in fact). Project manager is not accountable for the product/service/result or solution definition. Project manager is accountable for creating the product/service/result or solution as defined as exactly as defined in the framework of time and cost needed due to time and cost have been defined taking into account the opportunity window. So, define project succes like this: "growth in market share 5% in the current year" is a big mistake. Organization will not growth because the project Organization will growth because the product/service/result create by the project. If that´s not happend then Business Analyst has the activity named "Solution Monitoring and Assessment" which meant to monitor if the solution is achieving the expected results. If not, the loop restart.

The case you described is not a project failure. The project goal was to create a product, and that was done. There may have been an error in the organizational strategy. (I only say it "may have been an error" because we don't know the results of the other projects.)
This is not the fault of the project manager, and I doubt the problem is with the PMO- unless the PMO is making all the strategic decisions with no input, but I doubt that.

Let me slightly change the scenario to draw a contrast. Let's say our organization authorized a project to create a new product that was important to their strategy, with knowledge that a competitor was developing a similar product due to be released in the next year. In this scenario, the project manager spends months gathering project requirements, and no work begins until the project plan is complete and the schedule and budget baselined. (We can't use EVM metrics without a baseline, after all.) The competitor releases their product 6 weeks before ours- or alternatively, we rush to get our product out the door and sacrifice scope and quality. Consumers overwhelmingly choose the competition, and we fail to meet the projected ROI we had used to authorize the project.

In this alternate scenario, we have a failure of project management. But in the given scenario, project management realized the organizational goals as they were described; the error (if there was an error) was in the strategic prioritization of other projects.

Not at all. There is a big misunderstanding I have debated inside the PMI and today some things have been changed into documenation like PMBOK (not because of me. Other people said the same I said). Benefits are not achieved because the project. Benefits are achieved because the product/service/result created by the project. That is the solution to be created to address business problem (needs in fact). Project manager is not accountable for the product/service/result or solution definition. Project manager is accountable for creating the product/service/result or solution as defined as exactly as defined in the framework of time and cost needed due to time and cost have been defined taking into account the opportunity window. So, define project succes like this: "growth in market share 5% in the current year" is a big mistake. Organization will not growth because the project Organization will growth because the product/service/result create by the project. If that´s not happend then Business Analyst has the activity named "Solution Monitoring and Assessment" which meant to monitor if the solution is achieving the expected results. If not, the loop restart.

Hi Wade, Thanks for he response and agreed! in the alternate scenario this has to be taken into account.

I think in the case which I listed which was just an example cites the issue around 1) Failure to identify (or disclose) a key constraint around the timing of when the product was required for release 2) The controlling board for the roadmap not kicking the tyres properly around the change in revenue generation both resulting in the benefits failing to appear.

As I said this was an example to kick off the discussion and the answers coming back are a great source of knowledge, experience and opinion.

Thanks Sergio, great response and as always, the voice of reason.

If a certain profit margin was the criteria for success, it should have been stated as a project success criterion in the project charter. That would have eliminated any confusion whether the project was or wasn't a success.