Does "Fail to understand" have a negative connotation?

Yes, in this case, the way you've worded the quote places the blame for the lack of understanding squarely on XYZ, especially since you indicate that you believe the idea WAS conveyed by the article.

If you're looking to be a bit more round-about while still not necessarily faulting the article, you could try something like:

The idea the article was trying to present was unclear to XYZ.

I would say that yes, there is a negative feeling conveyed when you say that someone failed to understand something. With the meaning you're trying to convey, you may have more success by suggesting more directly that it was the fault of the article, e.g.:

The article failed to convey its intended idea to XYZ.

The idea in the article failed to be conveyed to XYZ.

In the third person, it always has a negative connotation, indicating a limitation of the subject.

In the first person, it also has a negative connotation, but not about the subject, so much as the object, or the author of the object.

I cannot think of a positive sense of the verb fail. So, yes, I would assume a negative connotation from your example statement.

This version shares the responsibility for XYZ's inability to understand more equally between the reader and the writer, without actually attributing blame:

XYZ was unable to make sense of the article's central idea.

If you want to place the blame on the author of the article, this version may be helpful:

After a second reading of the article XYZ still could not comprehend the idea the author had attempted to convey.