I'd say yes, communism and Buddhism are quite compatible, especially in the sense that Marx used it, i.e. the doctrine of the conditions of the liberation of the proletariat:
"In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic." (Marx, The German Ideology )
One of the things that I’ve been learning about over the past few months is Marx’s materialist conception of history and the idea that “the nature of individuals depends on the material conditions determining their production.” While Marx’s theory was set within a specific context — that of the complex relationship between the production and reproduction of material requirements of life and the historical development of human society — it has much wider implications. For example, I’m of the opinion that things such as identity are conditioned, at least in part, by the historical and material conditions that we find ourselves in, and that changes in those conditions can fundamentally alter our identity and the ways in which we express ourselves, and vice versa. Not in a rigidly deterministic way, however, but in a complex and symbiotic way.
This idea isn’t necessarily new, of course. The Buddha, for example, developed similar ideas about identity in his teachings on karma, dependent co-arising, etc. In short, he viewed our sense of self as a continuous process—something which is always in flux, ever-changing from moment to moment in response to various internal and external stimuli. Furthermore, he observed that there are times when our sense of self causes us a great deal of suffering, times when we cling very strongly to that momentary identity and the objects of our sensory experience on which that identity is based in ways that cause a great deal of mental stress. But his focus was primarily on how to relieve the suffering of the individual by mastering this process of “I-making and my-making” while Marx’s focus, the bodhisattva that he was, was primarily on how to relieve the suffering of society by changing the material conditions that support it.
As for the the reason why no country has been able to successfully implement communism (not including the countries under the banner of communism where the decisions are made by a select few in the form of an authoritarian and oppressive states), I'd say the short answer is the lack of the basic material conditions for its success. While those conditions are debatable, I think that most people would agree that having an advanced capitalist economy and a strong working class are the most important. Beyond that, I think it's a matter of having widespread class consciousness, as well as a serious and widespread desire for a new social order.