I'd argue that it's been quite successful. Think various comments have cleared that up, as well as modifying your definition of "successful."
A necessary forerunner to it was the XV-15. Yes, there were earlier aircraft, but this didn't work well until smaller turboprop engines, with sufficient power density became available. Prior to that, the engines were usually located in the fuselage and had driveshafts carrying the power to the nacelles on the wingtips. These were heavy and prone to failure.
As for why the Osprey has props/rotors instead of jets, let's talk about thrust and power. To get off the ground, you need more thrust than you have weight. Typically, if you're going to do VTOL, you need 110% as much. So a 2,000 pound aircraft needs at least 2,200 pounds of thrust to takeoff vertically, much less hover. Hover requires even more.
There are multiple ways to make thrust:
- grab a relatively small amount of air mass and accelerate the heck out of it. This is what turbojets and afterburning low-bypass turbofans do, as found in most fighter planes. There will be high-speed jet efflux, high temperatures and comparatively high fuel consumption with this route. The Harrier does this, as does the F-35B. Neither can do it for very long, though (significant fuel consumption), and you don't want to be anywhere nearby, on the ground, when they do it (noisy, windy, hot). If you need to go FAST, you need to do this.
- grab a relatively large amount of air mass and accelerate it a little bit. This is what the rotor does on a helicopter and, to a lesser degree, a propeller on an airplane. The rotor/prop wash has nowhere near the intensity of a jet engine's exhaust. There's also less heat and much less fuel consumption. But you can't go as fast (speed is limited by the airspeed of the rotor/prop wash).
- somewhere in between. High bypass turbofans on modern jetliners grab more air than turbojets, but less than props/rotors, and they accelerate the air more than a prop/rotor but less than a turbojet. Lower fuel consumption than the turbojet and less noise but higher speed than a prop/rotor.
If they could've done it with a single rotor, and found a way to angle that forward for "airplane" mode, they'd have done so; a single, large rotor would be more efficient than a pair of smaller rotors. The simplest mechanism they could develop, which would provide the capabilities of both airplane and helicopter, was a twin-engine design. You get a faster cruise speed and a longer range than any helicopter in the inventory and a broader flight envelope than any airplane (VTOL and hover).
Additionally, you need a degree of agility for maneuvering in hover. So you need the ability to change the thrust vectors while hovering; the "airplane" flight controls (ailerons, elevators and rudder) are useless in this mode. To accomplish this, the props/rotors have collective and cyclic controls like a helicopter. If you flatten the pitch on the forward part of the rotation, that will change the thrust vector to push down-and-aft, instead of just down. Coordinate this between the two engines and you have translation forward/aft, side-to-side and pivot, just like a helicopter.
To my knowledge, no one has succeeded in making a jet engine which can do this.
A jet-engined variant would likely need some kind of 2D thrust vectoring, downstream of the actual engine. There are existing examples of this:
- The F-22 does 1D thrust vectoring (each engine nozzle can pitch up/down). Used differentially, this can augment pitch AND roll.
- The Su-35 does something similar to the F-22
- The F-35B, as mentioned, does limited 1D thrust vectoring for STOVL
- Some advanced Mig-29s do full 2D thrust vectoring with both nozzles
- The F-16 VISTA demonstrator did full 2D thrust vectoring
- The X-31 also had basic 2D thrust vectoring, due to some deflector "paddles" aft of the engine. This is similar to the directional vanes used on the original V-2 rocket.
Assuming someone can come up with a usable 2D thrust vectoring system, mounted to the aft end of high-bypass turbofan (all the mentioned examples are turbojets, lower-bypass turbofans or rockets), it might be possible to do a jet-powered variant, at some point in the future.