It was never stated that all of the Kaioshin's failed, though. Kibito just says he and many Kaioshins have failed at removing the Z-Sword. For all we know, South Kaioshin probably didn't think he'd need the potential power the Z-Sword would give the wielder. He might've been content being the strongest of the Kaioshin's with his own power.
Kaioshin doesn't know who Cell is. He knows the Saiyans have a connection to Freeza, so he used him as an example. That shouldn't be used to diminish his capabilities.