Failing, as in the phrase isn't going mainstream, or failing as in they did something wrong?
Failing in that it was too late, and the term "modern sporting rifle" was such an obvious, blatant attempt to re-characterize something that had already been firmly emplanted in the public's consciousness as an "assault weapon" with an alternate, innocuous-sounding term. It was clear to everyone, on both sides of the debate, that the term "modern sporting rifle" was something the NRA came up with because they didn't know how to effectively rebut the gun-grabbers' characterization of AR-15 and AK-47 style rifles as "military" (style) weapons, suitable only for mass killing.
Basically, rather than confronting the lie and educating the public about the very real differences between a civilian AR-15 and a military M16 or M4, the NRA punted and tried to evade the issue. You may disagree, but I think it was a massive failure. Ask someone who isn't firmly on one side or the other of the gun rights debate what a "modern sporting rifle" is and you'll get a blank look in response. Ask them what an "assault weapon" is, and they'll tell you it's an AR-15 or AK-47. Ask them if they know the difference between an AR-15 and an M16, and most of them won't have a clue.