How do hydraulic flat tappet lifters fail?

PRH is spot on, with his comments.. Oil seems to be the biggest offender.
I had a long conversation with Tim Cole of CompCams back in the late 90's - 2K for the same reason PRH mentioned it.
His answer, then, was the centerline between lobe to lifter, MUST be offset by .050 to ensure proper lifter rotation. (this mostly applies to shivis, although it's never really been an issue with mopars )
BUT, that lifter is chipped. very unusual in my book. thinking a metallurgy issue..? bad set of china lifters perhaps ???
that lobe profile has been around since the 70's (213/.454), it's not like the Brookshire lobes, renamed voodoo by Lunati. that is considered to be a .742 lobe... it's very safe on a .904 lifter. baring a good oil has been used and correct break-in.