Although it is not common that they go bad, like anything they could fail. It has been reported here that when used with incandescent light bulbs and the bulb burns out that the current surge has damaged some rendering them useless. I have about a dozen in service for over 2 years without 1 failure. About 2/3 of them are used with CFL's and the rest with incandescent bulbs.
If it is working sometimes you might want to try moving it to a differant location (for testing) to see if that helps. You could have a noise problem or phase problem that is blocking the PLC signal.
(http://www.bdshost.com/X10/lpup.gif)---(http://www.bdshost.com/X10/lpup.gif)---(http://www.bdshost.com/X10/lpup.gif)---(http://www.bdshost.com/X10/lpup.gif)---(http://www.bdshost.com/X10/lpup.gif)----KDR