Yes. There are instances where the damage to the hard drive is so severe that data recovery is not possible. This usually occurs when the read/write heads actually "crash" and gouge the magnetic storage media to the point where the data is destroyed.
However, in a number of cases data recovery was possible at the time the damage first occurred, but became non-recoverable through the use of commercial recovery software. This software is designed to recover data from working drives. If your drive has experienced a mechanical or electrical failure, the use of recovery software can cause permanent loss of your data