Hard drives will always fail. There isn't a hard drive in the world that will work forever. The only question is: will my hard drive fail sooner, or later? Some hard drives will spin for 20 or more years (I have a few that are approaching 15 years of constant use). Some will die within a year (I have had this occur to me). Some will work for somewhere in between those two amounts of time.
Kind of like light bulbs -- more often than not, they'll work for a reasonable amount of time, then burn out. Some burn out quickly, at which point, you take the bulb back to the store and demand a replacement (which you can do with hard drives as well -- just not four years into the life of the hard drive typically). Then, you have some anomalies that burn and burn and burn, and never go out:
http://www.centennialbulb.org/
Unfortunately, no one has come across the magical "centennial hard drive" yet, and it would be foolish to expect that one's next hard drive will be the one that never fails.
Yours failed sooner (or, perhaps, later, depending on how you look at it). Sometimes hard drives fail slowly over time, sometimes they fail in a spectacular crash, sometimes they just quit working altogether and die a quiet death.
This is why your computer can work one day and be completely hosed the next. This is also why Apple makes it a no-brainer to keep an up-to-date backup by doing nothing more than plugging in an external hard drive and clicking "Yes" to the question of "do you want to use this drive for Time Machine?"
Your only option is to replace the hard drive and restore from your Time Machine backup (or whatever other method you used to back your data up). There is no way to "fix" or "repair" a hard drive that has mechanically failed.