That's your opinion, unless your talking about commercial failure. In that case, original DTP was a failure too.
The remake is so much more alive than the original. The enviorment is designed incomparably better, and yes, partly due to ps 1 technical limitations. I can't see how one can call this a failure, unless you are blinded by nostalgia.
What? The original DtP sold 170K copies in Japan, if I remember right. And you call that a failure?
Oh, why do we need to consider the sales in US/EU when the branches didn't pay much attention to it?
If you can read the development log at the old official site "Klonoa Home", you'll know the point of game lies on the story (not the visuals), and changes of the script seems to weaken it to many fans. Well, I believe the remake team had good intentions...
That should be enough, remember we're talking about the possibility of Klonoa 3 and "Klonoa in Smash".