There have been a couple of times that I checked the progress of a System Update task and found it was displaying the red "failed" icon. I checked the details and found one of the devices listed as "The task failed for the target device". Checking the log, all of the updates either completed with "success" or "reboot required". I pinged the system and, indeed, it was not responding.
A little while later, the system came online and the status for both the detail item and the update task changed to successful.
To me, "failed" is an end state. I would prefer if OME would keep the task in an "in progress" state during reboots (or add a new state of "restarting") until either the system comes online and OME confirms the status or if an appropriate timeout is reached. Marking the task as failed during the reboot is a bit too pessimistic. OME shouldn't assume that it just hosed the system it was applying updates to.
This was with OME 2.0. I don't remember seeing this occur with 1.3.