Naruto was only a failure for 1 chapter, where he then learned how to master an S class ninjutsu in minutes.
Part 1 Naruto was a full blown wank of Naruto. He literally low diff Haku who Kakashi admitted could beat him. Ya need to re read the series. Sasuke was hyped as a genius and Naruto was already stronger than him in the first arc. Naruto was an outcast because he had the strongest tail beast inside him, which also messed with his chakra flow(confirmed by Jiraiya) and still was beating S class criminals