Early ebooks both were and weren't a failure.

One thing to remember is that relatively fewer people had computers 20 years ago, and those who did probably didn't have a CD-ROM. That limited the reach of ebooks, particularly multimedia titles.

Another thing to consider is that the choice was far more limited. Most of the titles I saw were non-fiction, and primarily targeted at children or the education market. This limited the reach of ebooks since the market only suited readers with particular interests.

In those senses the ebook market back then was as successful as it could be, and not really a failure because publishers weren't really trying to address the needs of the market as a whole.

Of course they weren't really trying to target the market as a whole because it would only interest a small subset of readers. Ebooks of the day had many disadvantages (e.g. portability), were on par in many respects (e.g. physical distribution), and only excelled in a few areas (oddly enough, the areas that made them effective as reference tools rather than for reading for pleasure).

Production costs may have been another factor limiting the number of titles released, hence diminished the appeal to readers. A lot of those early ebooks used a "reader" developed by the publisher. In many cases the reader was for a specific title. In many cases they also tried enhancing the ebook with multimedia elements, which isn't cheap to do poorly (never mind do well). Modern ebooks are almost verbatim versions of print books, so a majority of print titles are made into electronic versions because it is cheap and fast to do.