It's been used for years, and many companies have successfully recovered from tape. Yes, many of have failed. However,...
I would say that MOST of the failures have been with low-end tape drives that should have never been purchased in the first place. I cannot say that all tape is good or bad, but I can say that some tape drives should have never been put on the market. (And no, I'm not going to say which ones. Can you say Oprah and the meat industry?)
In my experience, any reliability problems with tape can easily be remedied by having multiple copies of the data. This is not economical in disk environments, but it's pretty easy to do with tape.
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