I don't think it's nearly that simple. The 95-98% failure rate gospel is unproven and people need to stop saying that as if it's a fait accompli.
After the DAO hack last year, Plutus had a crowdsale and only raised about $1 million in ETH. It wasn't until November that Singular DTV had their crowdsale, which sold out very quickly!
ICOs were also unpopular earlier this year when ETH was making a giant run up. It took a while for people to stop buying ETH and start buying ERC20 tokens and ICOs, but many went stratospheric.
The instant 5-10x returns missing may be discouraging speculation, but that doesn't mean there still aren't great ERC20 tokens to buy.