Why did my implant and then my bone graft fail?

There isn't anything that you are doing wrong. Bone grafting can be a delicate process and being a newer area of dentistry, how to place the graft and how to handle complications is continually evolving. Also it takes a while for newer information to filter down to the doctors providing the procedure. It well might be that the area was infected. In that case the surgeon should have closed the area, placed you on antibiotics and waited for the body to kill the germs - several months. Only your surgeon truly knows what happened to you, and even he might not know. But he would be the best person to ask because he knows all of the specifics relating to your procedures.