What event caused the policy of appeasement to be viewed as a failure?

The occupation of Czechoslovakia on March 15, 1939.

France and Britain had pressured Czechoslovakia into ceding the Sudetenland, with the hopes of avoiding a German war in the Balkans. This was formalized on September 29, 1938, famously promoted as assuring "peace in our time." However, the territories with German majorities included many of the major defensive installations in Czechoslovakia, and a powerful German army was able to swiftly occupy the northern and western parts of the country. At the same time, Hungary, Poland, and Russia moved to occupy parts of Czechoslovakia as well.

This did not end the period of appeasement, but it demonstrated that it failed as a foreign policy.

Having seized Czechoslovakia, Germany was able to rapidly invade Poland from the west and south on September 1, 1939, generally considered the start of World War II.