Sure. But when you do that, the PCs are always moving forward toward the Inevitable Conclusion. And if even at The End death is off the table, the ultimate outcome is a foregone conclusion: if the PCs can try as many times as they need to, they will inevitably succeed. I mean, it's just as bad to arbitrarily say "this failure was the last one; you're still alive but you aren't allowed to try again" isn't it?
If there are no victory conditions in the game, then the end is predetermined and it is just a matter of how much fudging and contortions the GM is willing to go through to get there. In my experience, when players realize the GM has A Plan, it makes the game less fun because consequences stop mattering.
Of course death isn't the only fail state, but there should be a fail state, a point at which the GM looks at the players and says "Nope. You're done." Otherwise you don't have a GAME, you have a story one person wanted to tell to 4 other people.