It was supposed to reconfirm American supremacy in science and innovation -- an orbiting, automated telescope that would peer toward distant galaxies and open a new chapter in human understanding of the universe. But last week, the $1.6 billion Hubble Space Telescope, crippled by a mysteriously misshapen mirror, took its place on the list of great techno-fiascos.

"I find myself saying to myself, 'Oh, not again. What's gone wrong?' " said Kent Hughes, president of the Council on Competitiveness, a group that studies the U.S. stance in world technology. "Hubble is a little humbling."

The failure of the telescope, which two months ago rode into space amid great fanfare in the hold of a space shuttle, led more than a few Americans to wonder whether their country can get anything right anymore. The questioning became even more poignant on Friday when the National Aeronautics and Space Administration announced that the shuttles, too, would be grounded indefinitely because of vexing and dangerous fuel leakages.

But Hughes and other specialists deny that the Hubble's problems signal a general decline in U.S. technology. The telescope was an enormously ambitious undertaking, and it came within a hair's breadth of working -- and could yet be repaired by visiting astronauts. Failures of this sort, however disheartening, are the price of scientific progress, they say.

"Doing something that difficult, you have to dare to fail," said Robert Lucky, an executive director at the AT&T Bell Laboratories, who allowed that "a little piece of my heart" went aloft with the telescope. "... And we did fail."

The U.S. troubles in competing in mass production technology -- everything from cars to videocassette recorders -- are well known. But in basic research and scientific discovery, it has remained at the top, in a league of its own.

Before this week, things were going smoothly in space in particular: Shuttles were flying routinely again, putting behind the 1986 loss of Challenger. The world had been treated to a breathtaking view of the blue planet Neptune by the Voyager probe. And the telescope had successfully entered orbit.

Now Hubble is on hold and the shuttles are stalled on the Florida launch pad.

NASA has ordered an investigation into exactly what went wrong with the telescope. The scientific community, at least for the moment, has taken heart from the fact that the telescope's basic systems, new and complex as they are, seem to be working reliably. The failure, rather, appears to have been in a low-tech area, human oversight.

Had the system been for use on the ground, it could be shut down and the fault corrected with relative ease. But space is less forgiving. In February of this year, a European Ariane rocket, product of years of meticulous engineering, exploded shortly after lifting off from a South American launch pad. A panel of inquiry determined that a cloth had been left inside a water duct. In March, an American Titan booster left a $157 million communications satellite in a useless orbit because someone had run a wire to the wrong bay of the rocket's nose cone.

Such errors will always occur, some experts said, so the best approach is to minimize how much is at risk each time one does. Talk is arising in the space community that the failure could push the United States away from big-ticket projects such as Hubble or the proposed $17 billion orbiting space station or $17 billion Earth observation satellites in favor of smaller, more numerous ones that, like the prudent investment portfolio, spread risk around. Big science versus small science.

In the 1960s, the big-project approach raised fewer eyebrows. Money was in greater supply -- a 1960s Hubble might well have had a backup waiting to be wheeled to the launch pad if the first failed. In the lean '90s, there is no such luxury.

"The hype {about the Hubble} was correct," said Jeffrey Manber, executive director of the Space Foundation, a nonprofit group devoted to commercialization of space. "It was the most sophisticated unmanned payload to go up. And the unfortunate thing is that it's the entirebudget -- there ain't nothing else. ... Space science cannot sit around for mammoth projects once a generation."

In addition, tight funding also may have contributed to this failure. Some NASA officials have said that conducting tests that might have caught the error on the ground would have cost hundreds of millions of dollars.

"The management with inadequate resources has to make decisions about what not to do," said space policy analyst John Logsdon of George Washington University, suggesting that somewhere, someone was forced to gamble that the mirror had been built correctly.

Hubble could bring changes affecting large-scale projects even outside the realms of space. The U.S. government is funding megaprojects to build a new-age facility for physics research in Texas (the $8 billion "superconducting supercollider") and a hypersonic jet that would take off from a runway and fly into orbit. Not to mention the Strategic Defense Initiative, former president Ronald Reagan's vision of a "peace shield" that could shoot down incoming nuclear missiles.

More difficult to gauge will be the damage to Americans' faith in the technology of their companies, government and universities. Some specialists play it down, pointing out that the tragic Challenger explosion was much more emotionally powerful than the Hubble trouble. Four years later, they say, the memories have receded and the United States has shown that Challenger was a one-time occurrence.

But others feel that extra effort will be required to minimize the fallout from Hubble. "The scientific community really needs to re-prove itself, regain some of the confidence that I am sure it will have lost," said Roland W. Schmitt, president of Rensselaer Polytechnic Institute. Extra attention to details and all the things that might possibly go wrong on high-exposure projects will be needed, he said.

In the meantime, the Hubble failure is being reported in news media around the globe. Whatever the cause turns out to be, it may foster beliefs that the United States is a sunset power, incapable of repeating its technological feats of the past. Sales of U.S. products could be affected. The skills needed for mass production on factory floors may be completely different from those needed for single-unit technology projects such as Hubble, but that is a distinction likely to be lost on the mass of consumers.

In Japan, U.S. know-how already has a battered image. U.S. cars sell poorly, partly because of a perception that workmanship is shoddy. A 1985 crash of a Japan Air Lines 747 was traced to faulty repairs performed on it by its American maker, Boeing Co. At least one Japanese official has commented that a space shuttle that Japan plans to build for itself in the future will not shed tiles from its body during reentry, as the American versions do.

Hubble's problems are "going to have a very negative impact" on Japanese perceptions, predicted Daisaku Harada, who heads the U.S. office of the Japan Productivity Center. "There is no doubt about it."

The failure doesn't affect just a single country. Hubble's findings were to be shared freely across national borders. "I would see it more as a blow to world science," said David Teece, a professor of international business and finance at the University of California. "It's not a blow to the United States."