What is Failure Really

So many of our young people really don't know what it is like to fail.  I know you read that and said "wait a minute, lots of kids fail, you don't know what you are talking about".

I beg to disagree.

We live in a world now where "no one can fail".  Everything the kids participate in requires an award, so no one feels "bad" about not winning.  That leads to more and more young adults feel that they are owed something because they "showed up", not because they "earned it".

If you are continually rewarded for "showing up" and "just participating" how do you really know that you have succeeded? What's the benefit to succeeding?  Why would you want to work hard or try harder to be better if you can never fail and in essence get the same "rewards" as someone that is just there?

Now I am not saying that when you fail, you should be victimized or berated because you didn't have the success that you wanted or that others expected of you.  

But what I am saying is that without failure, you can't or won't have that "fire within" that will lead to success.  
There won't be any need to apply yourself to anything because everyone is the same.

I know understand that the psychologists say that we need to make kids feel "better about themselves" by giving them trophies or awards even when they don't win, because we don't want to harm their psyche ... so to not make them feel bad about failing, we reward them with a trophy or ribbon or whatever.

But what about the kids that really do excel at something or seem to show a talent, whether it is school or sports or art or music? 
Aren't we going to harm their psyche by not allowing them to shine (have/award their success) because they worked hard or are just different?
Thank you David Avocado Wolfe for reminding us the Success is just Failure turned Inside Out!

Do you agree?
Or do you think I am totally off base, that I don't know what I am talking about?