A:First of all, let me tell you that this is a great question. I think the answer to this question is a matter of personal perspective, but much more, it is a matter of facts, historical facts.
The USSR (and the Warsaw Pact) was the leading socialistic body in the eastern block for about 69 years, being an “efficient” rival to the United States and NATO. Much of the Soviet people were proud communists who had full belief in the system (some of the Russian citizens still are). If so, why did the communistic system failed in the Soviet Union?
Some of the reasons for the downfall of the USSR (and the Warsaw Pact) were mentioned here by earlier repliers, but there were reasons which were not mentioned. I believe these were the main reasons for the downfall of the Soviet Union:
1. During the years 1964-1982, Leonid Brezhnev was the General Secretary of the Communist Party of the Soviet Union. During his time as a ruler, he became responsible for the economic troubles of the USSR, basically because he (and his “government”) ignored many economic fundamental problems. After his death, the leaders who came to power had to struggle with the so called “economic legacy of Brezhnev”.
2. In 1985, a completely new type of leader came to power: Mikhail Gorbachev. During his years as the General Secretary of the Communist Party of the Soviet Union, and later as the President of the Soviet Union, he did his best to pull the USSR out of the “communistic middle ages state” into a state a super power should look like at the end of the 20th century. He tried to perform reforms (such as the well known “Glasnost” and “Perestroika” reforms) which were suppose to make the Soviet economy grow again (after the economic crisis of Brezhnev) and the political system to be more democratic. Gorbachev did not agree with the soviet one-party system, and in 1990 he was elected by the newly elected Congress of People's Deputies as the first (and only) President of the Soviet Union. It is important to know this, in order to understand the power of a change in a system, that had been burned in the minds of the soviet people by Lenin and Stalin, long before Gorbachev was even born.
3. After such enormous changes in a country who knew only totalitarian regimes, much unexpected has occurred. People of the socialistic states within the Warsaw Pact and the Soviet Union itself, saw it as a weakness in the system and began rioting against the USSR. The rulers before Gorbachev had a way of dealing with such “internal affairs” - sending in the tanks. But Gorbachev did no such thing, at least not until it was far to late. The people of the different states of the Warsaw Pact and the USSR knew only too well the sting of the iron fist of the so called “old type communists”, and they were afraid Gorbachev will soon fall from power and be replaced by some Stalin-like figure (as was attempted by some Red-Army communistic militants). They knew they had to act quickly in order to avoid some very unwanted consequences including Red-Army tanks and numerous deaths; And so the riots went on. After the coup attempt of 1991, the Soviet Union collapsed completely. The states that formed the Union of Soviet Socialistic Republics (USSR) were suddenly free from the direct rule of the Communist Party of the Soviet Union. Gorbachev, as the president of the Soviet Union was no longer relevant, as he no longer had a country to run.
I think it is very important to see the things through the eyes of history in order to understand why and how things happened. The communistic system in the Soviet Union was build upon the dead bodies of the nations people. Gorbachev once said, “I thought I could improve the system, but I came to realize that systems such as this, which was built by the force of Lenin and Stalin, a system that survived only thanks to the strength of the Red-Army and the fear from it, will not be able to survive as a democracy - because of that same fear” (it is not an exact quote!).
The people of the Soviet Union and the Warsaw Pact knew only pain and fear of what was suppose to bring them the exact opposite. They did not debate over the economic systems, over the affects of communism against the capitalism and the free market. They wanted out of a terror regime, and “communism” was just a name for it. The communism failed before and continues to fail today, because no one (accept maybe for Gorbachev) ever tried to make it a system FOR THE PEOPLE, as it is suppose to be.
Hope I gave you something to think about, and maybe even an answer to your question.