I agree about Voldemort's motivation. As to why it didn't work, I I think Quirrell has been rather explicit that wizards were sheeple:

"Dueling?" said the Defense Professor. From behind it wasn't visible if the pale face was smiling. "That is nothing, Lord Greengrass, to what my students have learned. They have learned not to hesitate in the face of ambushes and greater foes. They have learned to adapt when combat conditions change and change again. They have learned to protect their allies, to protect more those who are more valuable, to abandon pieces which cannot be rescued. They have learned that to survive they must follow orders. Some have even learned a little creativity. Oh, no, Lord Greengrass, these wizards will not hide in their manors and wait to be protected, when the next threat comes. They will know that they know how to fight."

My tentative hypothesis is that Voldemort/Monroe realized that his original strategy to unite Wizarding Britain by presenting them with a common enemy wasn't working, so he set up the events in Godric's Hollow to make it appear that Voldemort had died (in an absolutely ridiculous and implausible way, that everyone except him and HJPEV would immediately believe). Then he could proceed to try something else.

It's commonly said that the definition of insanity is doing the same thing over and over again and expecting different results. It would probably be better here to say the definition of irrationality is doing the same thing over and over again and expecting different results. Quirrell, unlike almost everyone else in the story except HJPEV and maybe Amelia Bones and Moody, is rational.

I suspect Harry's memories of that night are faked. I don't have any good hypotheses for what really happened though. I'm toying with the possibility that Voldemort didn't actually kill Harry's parents, and possibly they aren't even dead. There are 2 or 3 clues that could point to that, but I don't think they're strong enough to overcome the prior implausibility. More likely Voldemort did kill James and Lily, and then did something to Harry, Horcruxed him most likely, but deliberately, not accidentally. How does anyone know, in canon or HPMoR, that Voldemort cast Avada Kedavra on Harry? All we have is the burned body. No one except an infant saw it happen.