The United States in the XIX century was mostly ignored in European politics and they didn't pay much attention to what was happening there. I know that in Britain the American civil war emboldened many British citizens and a movement began in the 60s for expanding voting rights to poorer people as only circa 1.1 million people had the right to vote. This culminated in the Reform Act of 1867 which expanded voting rights to many working class citizens so in the case of Britain, the civil war actually helped expand democracy. To answer your question more broadly, democracy was quite often downplayed by the nobility and the elite in the Habsburg Monarchy (Austria) and in Russia but also in Prussia. It was viewed as the complete opposite of law, order and stability.

Was the US seen as a failed state?

No, but most Europeans saw it as an inferior, backwater state up until the late XIX century.