I have never heard people say or write like 'People say Edison had failed 9,999 times.'
Is it a correct sentence?
I think it should be 'People say Edison failed 9,999 times.' or 'Edison is said to have failed 9,999 times.'
All of those are perfectly acceptable. Yes, even the first one.
The first one means something different. It means that the failing was before some previous time. We don't know when that time was, but it was before now, and after he failed 9,999 times!
I'll say that the way you wrote it 'People say Edison had failed 9,999 times' is not terribly common. It would be more common if it were, say, 'People said Edison had failed 9,999 times.'
'People say Edison failed 9,999 times' is fairly reasonable. 'Edison is said to have failed 9,999 times' - though you do hear it, I find it a bit more pompous or jangly to the ear. Maybe you'd see it more likely in writing than in speech.