This is something that's been bugging me over the last few sessions I've run. The rules for skill challenges seem to make it almost impossible to fail at a task, if you don't stomp down hard on what skills are permitted to be used in a challenge, or force the players to only select one skill each. I play with a slightly-larger than normal group with six players, but a standard "You've landed x kilometres away from the McGuffin your sensors spotted, but you can't narrow it down any further from orbit. Make an exploration challenge to track it down from here. Time for an exploration challenge!" will routinely lead to more than double the successes needed even for the supposedly most difficult challenge, and my players are only at Rank 3.

As far as I can tell, the rules are simple. Each character with a relevant skill may participate in a skill challenge of a particular type, though they may only use that skill once per challenge. Additional skills can be tested by the same character. Each success adds the degree of successes to the total, and makes the next skill attempt easier by +10%. Failures do not remove successes, but will increase the difficulty of the next test by -10%

What am I missing?

Degrees of Failures do remove successes!

I am not a fan of the Exploration Challenge system. Used them twice and found the system lacking. It is too easy as the OP stated and does not improve the quality of the game IMO.

I have no plans of using said system anymore.

Funny, I actually liked the system enough to steal it for other kinds of extended actions, like long combat, though I don't usually run it exactly as written.

Usually I come up with several possible outcomes depending on the number of successes they can accrue. I think the core of the system has great potential for abstracting extended actions that might otherwise be tedious.

First I usually come up with several possible outcomes depending on the how many successes/failures they achieve. Typically one roll represents a certain amount of time or a discrete stage of the event. And I rarely just have them just roll against their skills, it is almost always a -20 to -40.

Like I said, I have found success in several areas. Exploration is the obvious one, as well as research. Since they almost always seem to be racing against the clock there are usually real consequences to not passing the first time, and they often have to move on without maximizing their successes, which can be a tough decision for them.

I especially like it for the occasional extended combat actions. A few sessions ago they had to get down through 18 decks infested with 'zombies' , with the zombie density increasing at each level (I was actually trying to put them in a situation where they would have to go to come up with an alternate solution to escape as it became increasingly apparant that there were just too many.

I really didn't want to play several hundred turns of combat against thousands of zombies, obviously. So I hijacked the exploration challange system, and made it a contested role.

Each round represented one decks worth of progress, and the zombies bonus went up each round. The players would have to get a number of successes each round equal or greater than the zombies successes, and every failure represented a wound accrued, which they could allocate as they wished. By the time they realized the situation was untenable the zombies were up to a +120 bonus and getting 14 successes a round, the group was having to make tough decisions about who could afford to take another wound, the atmosphere was tense, and I had avoided 5+ hours of dice rolling.

Other times the group has done research or exploration, knowing that the more successes they get the more useful information/discoveries they will make, but also knowing they are racing the clock. Each player gets the chance to creatively figure out how they can put their skills to use (Oh, I can use my underworld contacts to get information on their hide out. You use your scholarship to study the city records to find out about the building!) It often comes down to difficult choices like "Ok, we have found where they are located, and have a rough idea of where they are. Should we take another round (6 hours) to do research and possibly find a back door/guard locations and shifts/find more information on a sympathiser, which risks the hostage getting killed? Or should we move in now?"

Like I said, I think it is a great system; its fairly elegant and encourages creative skill use. But the onus is on the DM to make the event meaningful. The DMs job is to provide the players with interesting and difficult decisions to make. Without that, any system ends up being boring, weather it is exploration or combat.