It sounds like our main disagreement lies around whether to call it "design error" or "build error" but I do not believe this erases the useful distinction between "error present in the thing from day one" and "unpredictable failure of component suddenly no longer doing what it used to do".
I think that's definitely part of it. I also believe that a physical component put under stresses it was not capable of bearing, even when those stresses were known to be within the expected environment at design time -- such as a bolt that was too weak for expected conditions -- is both:
1. Generally referred to as a "failure" of the part
2. Closely analogous to many software defects that cause system failure.