Trying and failing indeed doesn’t make you stupid but in many circumstances, e.g. being poor, makes you stop trying or the feeling of inferiority seeps in. Also the people around you set a background that make it even harder to escape from.

if you keep trying and keep failing, and you do not adapt in the process, it does not make you smart. By failing, we learn and adapt. In theory it would make the next move wiser than previous moves.

I agree calling it stupid may not be accurate.

It does in a lot of courts of public opinion, unfortunately.