Chapter 7 is extremely significant, and the reason it is significant is also the reason that the SAB is wrong about failed prophecy in this particular case.
David comes to be speaking to the prophet Nathan one day, and he says that he feels bad that the ark is kept in a tent while he lives in a palace, hinting that he would like to build a temple. Nathan thinks this is a great idea, and encourages David. It's worth noting that Nathan says "for the LORD is with thee", because later, God seems to speak to him in a dream and correct him; since the idea sounded good, Nathan assumed that God would agree. Although the SAB did not mark it as such, some might be tempted to think of this as failed prophecy, but it's rather a failed prophet.
God gives a message to David that he is not to build a temple, but that a descendant of David's would instead build a temple, and God would establish the kingdom of that descendant for ever. The SAB says of this passage, "God says that Solomon's kingdom will last forever. It didn't of course. It was entirely destroyed about 400 years after Solomon's death, never to be rebuilt." This is only half right.
Yes, Solomon's kingdom only lasted about 400 years after Solomon, but that's not the point. The prophecy concerns a descendant of David, but it doesn't say which descendant. The assumption that it's talking about Solomon may seem reasonable, since he inherited the throne of David, but there is something deeper here, and while you may have already guessed where I'm going with this as a Christian, I do think that even Jews accept this interpretation with the exception of the specific fact that I claim here: this prophecy is concerning Jesus of Nazareth.
Matthew 1:32-33 says of Jesus, "He shall be great, and shall be called the Son of the Highest: and the Lord God shall give unto him the throne of his father David: And he shall reign over the house of Jacob for ever; and of his kingdom there shall be no end." Acts 2:30 says of David, "Therefore being a prophet, and knowing that God had sworn with an oath to him, that of the fruit of his loins, according to the flesh, he would raise up Christ to sit on his throne" Sound familiar? This prophecy is not of Solomon, but of the eternal kingdom of the Messiah that is to come some day, Christians of course believing that person to be Christ Jesus.
The SAB asks, "Does God lie?" Well, the issue is not so pressing in this case, as David is not necessarily making a blanket theological statement so much as affirming that he believes in this prophecy. I'll leave the larger issue of God's willingness/ability to lie for a another time.