I've worked on many great projects that have ended up going nowhere, sometimes because the market simply didn't materialize, sometimes because management pulled the plug just before shipping, sometimes because the whole company went bankrupt because funding dried up because our lead investor was on a plane that some terrorists blew into a building.
These "how to hire the best people!" articles are worse than "Cosmo" giving dating advice to teenage girls.
It means whatever you want it to mean. The point is to get you talking about a project you care about. About the specifics rather than generalities.
Your comment sounds like a perfectly fine answer to me. I personally would ask you which project was the most interesting to work on? Or which were you most disappointed by when it didn't ship? And why.
At least, that's what I'm looking for when I ask it.
That wouldn't be a deal breaker for me, but for someone who supposedly has a bit of experience it's a red flag.