Stupid Expressions

You're familiar with the phrase, 'Failure is not an option.' What the hell does that mean? I mean, do people working on any kind of project ever have the following kind of conversation?
'I'm glad we're all together, so we can review our options. Jim, why don't you start?'
'Well Mary, if we want to get this project finished on time, we could add more manpower. But it will make things more costly.'
'Uh huh. And you, Suzanne?'
'I can see how we can cut some corners here and there, that's something we could look into.'
'OK, how about you, Frank?'
'Well, another idea is that we could just fail.'
'Fail?'
'Yes, you know, not succeed.'
'Aha. Well, we'll keep that option open for sure.'
'Thanks, Mary.'