Was the Google Nexus One a flop? Not even close.
I found the web site ordering hugely convenient for three reasons:
1) I cannot stand going to Verizon, AT&T, Sprint and other brick and mortar stores with their cloying and generally clueless sales personnel. 2) I am an American living outside the US, so it made sense to order it online and pick it up when I came to visit my relatives in the States. 3) Because I travel a lot and change providers often, I like to own my phone. I do not want to have the provider put all their crap software and branding in the handset for me to remove later. Having the phone unlocked and unencumbered with 3rd party software was a blessing.
I realize I am in the minority. Just my 2c.