It’s hard to determine the exact point where Objectivism derails, but IMO it is in ethics and morals where a certain amount of reality is ignored by the more dogmatic objectivists. It is a nontrivial task as they themselves acknowlege: e.g., what is “good”? It is the one of the highest level, most abstract concepts built on a large base of underlying concepts.
Man is inevitably born into the world naked and hungry, totally dependent upon his mother for the necessities of life.
I would term "good" anything that improves his condition from that of a newborn while causing few negative consequences to the condition of others.
The great failing of socialism is the bankrupt idea that economics is a "zero sum game"; that is, that there is a fixed amount of wealth in the world and "fairness" amounts to deciding who should have it.
Man's ability to reason makes it possible to create massive wealth and to improve the condition of billions of people.
Agriculture and domestication of animals is "good".
Vaccines and indoor plumbing are "good".
Antibiotics are "good".
Mass production of tools is "good".
Our ancestors would be baffled and amazed at what passes for poverty in the U.S. today. Americans just need a good wake-up call to drive home the point. I fear that that wake-up call is fast approaching.
It's right at the beginning with "existence exists".