Actually having worked on failed projects (this seems not to be the case here) is often seen as a positive experience for following employers (well, maybe not so much for the head of such project).
The general idea is that any good candicate should learn from his errors, or the errors of others he have seen. If he is any good he should avoid doing the same kind of error in the future, and having seen other fail he will probably avoid being overconfident, which is dangerous.
Henceforth, you really shouldn't remove that experience from your resume, but be ready to speak about it, of what you believe were the root causes of the problems and also of what was done right and the intents of the people. Just avoid being too negative about it that is usually not well perceived by recruiters (despising other people, even after a failure is not an interesting quality in anyone).
On the other hand being good at failure analysis is a great quality for a candidate and it is luck to have such good subject likely to be discussed in an interview.
But of course it won't ever be the only subject and you will have to show your skills as in any other interview.