If you look carefully at the failed retaining wall it is obvious that it failed at the bottom which is where lateral (horizontal) pressure would be at a maximum

If you look carefully at the failed retaining wall it is obvious that it failed at the bottom which is where lateral (horizontal) pressure would be at a maximum. For my money, insufficient drainage was the cause. Pretend that the retaining wall is a dam. Most of the time it has to only deal with soil/subsoil/rock pressure. The lateral force on a soil dam is not the same as water - most of the force is downwards (gravity) which does not affect a dam which worries about lateral forces. However there is a certain lateral pressure anyway. Think about a pile of sand being poured. The sand tries to move sideways as well as building upwards - the sideways bit is the lateral forces on our dam. Water always moves sideways and that's the main difference. However water is less dense than sand. If we don't allow water to drain effectively then we have both a soil and a water dam. Retaining walls that survive a day (ie can deal with initial loads) generally collapse later due to shit drainage or inappropriate "solutions". In my opinion - mostly drainage.