The word fiasco is Italian for an ordinary flask or bottle and comes from the opera.
There, audiences would greet a false note or a bad performance with the cry “Ola fiasco.”
The logic was that they had come to hear perfection but were getting a second-rate performance.
So just as a glass blower’s flawed attempt at a beautiful piece of art was discarded or assigned to be a common flask, the opera was second rate, like a fiasco.