In quilting we have insider acronyms for projects that we never finish or that we perhaps should never have finished:
The UFO (Unfinished Object): Something like a king-size all-white wholecloth quilt with twelve stitches per inch; in my life time I've only seen one master quilter actually finish one, and it took her seven years (as I described to Darlene in comments to my old Genreality post here.)
The WOMBAT (Waste of Material, Batting and Time): That tumbling block patchwork pattern baby quilt looked so gorgeous in that catalog back in the 90's, as did the hot-pink and electric-blue leopard-spotted fabric chosen for it. Only the quilter didn't get it finished until the newborn was in their senior year of high school and now wouldn't be caught dead with that pink-blue horror, not even if you offered a large cash bribe.
Once a year the wise quilter will find the courage to get rid of her UFOs (usually by donating it to the guild kitty for someone else to pick up and brood over for another year or five) and repurposes a WOMBAT into something less revolting (personally I can make anything into a tote bag) so she is free to move on to new projects with little or no guilt. Alas, not all of us are that wise, so we save things and work on them here and there and wallow in our guilt.
I think the same thing can be true of writers:
The NFS (Never Finished Story): Five to five hundred pages of that brilliant idea that should have written itself, but didn't; half of an epic novel that lost so much steam in the middle it could pass for a half-eaten donut; or whatever other opus that fizzled out on us.
The WOMPET (Waste of My Paper, Energy and Time): Big strong alpha male homoerotic Were-Sloth Brotherhoods were going to be the next big thing! Writers knew it! And wrote it! And then they weren't (whimper.)
I don't think there is anything wrong with writing the NFS, as long as you don't make them such a habit that you never finish anything. One good way to thin out your unfinished work file is to make a committment to finish at least one decent NFS before you start a new project. Why finish what sucks? Because you're developing good work habits. Keep making a promise to finish what you start, and eventually you'll never need a NFS file.
Too many WOMPETs, on the other hand, can be tough to handle. We all have them, and any writer who says they don't has simply done the brave thing and burned all theirs. It can be the Trunk Book, the One That Was Supposed to Sell Like Hotcakes, the Book of Your Heart or any painful variation thereof. It's sitting somewhere in your home or office unread, unwanted, and silently gathering dust, and that's probably all it will ever do.
But the WOMPET says something about you as a writer, and not what you think. It's not a symbol of failure. It may look and feel like one, but in a sense the WOMPET was the complete opposite of a flop. You used your talent, practiced your skills and gained experience, something you can't be taught, you can't buy, and you can't pay to have done for you. You wrote, and you learned. That's a genuine achievement.
The only real, practical way to learn how to do this job is to do the job. Every day or as often as you can. As the ladies of RWA say, backside in chair, hands on keyboard (BICHOK). Start to finish. Over and over. You make it your job to write as many WOMPETS as it takes to find your voice, develop your skills, refine your style, and bring your writing up to professional level. This doesn't happen over night. You have to want it, pursue it, and work for it.
A finished story that didn't sell is not an object of shame, nor is it really a waste of your paper, energy and time. Instead, think of it as a HIPMA: How I Practice My Art.