Genesis 6:6

"The LORD was grieved that he had made man on the earth, and his heart was filled with pain."

Did God fail?  Was his creation a mistake to regret?

In order to determine if God failed, we must first determine what God set out to do in the first place.

If you say "God failed to create mankind without sin", you would be in error for we were created good and perfectly. If you say "God failed to create mankind without the capacity to sin", you are also in error not because mankind has no capacity to sin, but because that is not what God purposed to do in the first place. You cannot fail in that which you did not even try to do.

So did God fail when he realized how wicked humanity was through Sin? Well what was his original intention? For mankind, to create us in His image and give us free dominion over all the Earth so that we might walk with the Lord. 

Had God wiped out all of humanity during the flood, then yes, he would've failed. Had sin and Satan had the final say in keeping us in eternal separation from God, then yes, God would've failed. However, we still remain and the truth of the matter is that we Christians are those who now walk with God and have dominion over and against Satan, being remade into His image. How? Through Jesus Christ's redemptive work on the cross, he has humiliated Satan and rescued us from his domain. It is because of the truth of Jesus Christ that I can tell you with confidence that despite Genesis 6:6, God has not failed to do what he set out to do.