We haven't failed. The basic self-exciting mechanism is used to produce the electricity you're using now, just (mostly) not with a fluid generator (MHD generators do exist and are in use, though). Lab experiments have verified that fluid flows can produce magnetic fields. They are not very similar to the Earth's own core, but that's just because it's a little difficult to produce a planet-sized sphere of convecting conductive liquid in the lab. Various approximations have proven the effect, though, and MHD simulations of real planet cores produce magnetic fields.

http://focus.aps.org/story/v19/st3
http://complex.umd.edu/dynamo/3m.html