I would guess that it kind of backfires on them - I stop going if they won't sell me what I am looking for simply because I know of gun shops where I can buy ammo and I can usually get a gun at a comparable price...
There is nothing to assume anyone was trying to be offensive - Business is business, this isn't personal. I am sure there are lots of people out there with the last name Fail, but there is a reason why there isn't a slew of "Fail" branded goods and services.
I own a marketing consulting...
Seriously - from a marketing standpoint, the Fail is not going to do you any favors. No offense at all - but I know what I am talking about. Good luck with your business!