RNG has always lead to streaks. Putting in bad luck protection is just curtailing what RNG is. You don't just make one side of the coin heavier so it favors landing the face you want more often and call it still random, because then it isn't. And that is the crux of the argument, that you could reduce the AC of enemies or difficulty dialogue checks, but getting that 3 roll on a 5 roll is still equally aggravating and the outcome is the same, you end up staring at the loading bar again. Same for missing 30% of the time instead of 50%; that miss feels like total ass regardless.
What is a fun failure option with failing to persuade Kagha to not envonm a child to death? What would be the fun option to failing to convince the Zhentarim to release the captive artist? To me the outcome of failure is pretty obvious. The point being that regardless of what "alternatives" they offer in failure, you're still not getting your desired outcome, which prompts the save reload BS.
There's a difference between the presence of streaks in RNG and an RNG system that favors streaks. In Larian's default rng system, there is a clear sine wave pattern, where low rolls are preferentially followed by further low rolls, etc:
https://docs.google.com/spreadsheets/d/1tdyBoQNS_vwEGZGBgFRQex7b-Ma8S6P7zvEMK5wh9n4/edit?usp=sharing (credit @Niara)
Furthermore, doing a statistical Pearson's Chi-squared test using 508 rolls, BG3's base rng system is
inconsistent with a truly random system at 95% confidence. The weighted system, however, is consistent with a truly random system. (Neither of these analyses accounted for order of rolls, simply the total # of each number rolled)
As I mentioned, BG3 does not have enough fun failure options. This is a criticism of BG3, not "fun failure" as an idea. A possible change for the Kagha encounter is, if you fail to persuade Kagha to hand over the child, she goes to kill the child and you get additional reaction options. You could stand by and let it happen, put yourself in front of the child and take the snake bite, or react quickly and kill the snake. Each has its own positives and negatives, but puts agency in player hands instead of ruling everything by rng.
