I believe the culprit here is your fire-making technique, NOT the fire-steel....
The fire-steel's sole purpose is to provide a reliable ignition source for your tinder.
Your photos show that you already passed the ignition phase and that your trouble was in sustaining combustion of your fuel source (twigs).
No matter what your ignition source was, you would still have had problems because your twigs were saturated and so was the ground you were working on.
In all likelihood your early attempts dried out your twigs enough to sustain combustion.
Here's a video that shows demonstrates the BEST way that I have found to start a twig fire :
http://www.youtube.com/watch?v=9VvIbroqGBMAs stated in this video, I cannot recommend the log cabin or tepee techniques as you have almost zero control over combustion of your fuel source.
I've used this brace technique personally with great success and have never had a failure, even in totally saturated Michigan hardwood forests. <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
