Examples of usability disasters?
The worst horror story I know is the Therac radiation therapy device that killed patients. The case study is available as well.
Some articles have mentioned the complexity of the user interface as a contributing factor.
There are obviously a wealth of terrible websites out there, but to be honest the worst consequence of <blink>
-ing text and animated GIFs is slight eye strain for the user.
One of Alan Blackwell's favourite examples of bad design causing large-scale failure is the 2000 Palm Beach election debacle.
This image shows the ballot papers used in some parts of Florida in 2000, with which there are a few usability problems.
Pat Buchanan received an inordinately large number of votes, while Al Gore received many fewer than expected in areas where this design was adopted (comparing official results to polls). Many have theorised that this is because Democratic voters saw Gore second from the top of the candidate list, and naturally went to punch the marking area second from the top of the page, mistakenly choosing Buchanan.
To make the problem worse, there is a strong black line running across the top of Al Gore's box, pointing exactly at Buchanan's marking area; a strong visual cue that some voters might have followed rather than the arrow to the side of Gore's name.
Compare this to George W. Bush's area. His name is top of the ballot, and his marking area is top of the ballot. Also, his marking area is sandwiched between an extremely heavy black line on one side, and an arrow on the other.
Combine this with the abnormally high number of spoiled papers due to multi-page ballots with each leaf marked "Vote on all pages", as well as the difficulties the Votomatic machines had in fully punching the ballots, and you have a handful of poor usability choices which changed the course of the most powerful nation on earth.