Let's take one of the more known missions from Alpha Protocol. The museum. The way it's build now is just your basic forced sacrifice. By that I mean no matter what you do, some are saved or killed. There ain't no option for failure, nor option for success. There's just 2 choices - Do you go left or do you go right.
What I'm after is that based on your actions, there would be both the left and the right option, but also success and failure. You play your cards right and you might have a tiny chance to save everyone. Or if you totally mess up, whole museum is blown to dust. Bonus option would be of course that you blow up the museum and thus kill all the terrorist inside (I call it Chotic Stupid option, my all time fav).
Ok, let's take your argument and compare it to real life. Does life stop because you made a mistake?
What you describe are just choices, failure is not a choice and in the case of life and death situation it ends with you dead and unable to continue your playthrough.
In AP there was a greater objective the circumstances of which were determined by the sum of all the choices made through your playthrough. How hard the enemies are, who comes to your rescue (if any) Allies turning into foes. Failure would be losing and reloading
I mean, how would you implement failure in a game?