Some people think it's too soon for Windows 7, if that's what they're really going to call it. But having been released to manufacturing in November of 2006, it'll be almost three years by the time Windows 7 is relased (and that's if it's on time).
Looking at Apple's OS X delivery model, not to mention the Linux community, the operating system gets a refresh every year or two. And peering into the past a little, the Wintendo platforms (95, 98, 98SE, ME) all were released a few years apart. For the 32-bit family there was a large gap between NT4 and Windows 2000 (Oct 1996 and Feb 2000 respectively), but XP came out in Oct of 2001 and XP SP2 (essentially an OS refresh), in August of 2004. There's a timeline on Wikipedia.
So how does this make Vista a failure if Microsoft is just staying on track with it's release schedule?
A great amount of information can be found at the SuperSite for Windows.