From the '95 shop manual:
There are two temp sensors in the '95 Zetec t'stat housing.
The upper one, base part # 12A648, is the one that the PCM uses for engine and cooling fan control.
The lower one, base part # 10884, is the one that the temp gauge uses, they are independant from each other.
It appears that the one you're having trouble with is the upper one. Disconnecting it means that the PCM is getting incorrect engine temp data and is making the wrong decisions about how to control the engine (aren't you getting a CEL?). Running without this sensor can't be good for the engine in the long run - I'd get it replaced ASAP.
It's basically a thermistor that supplies a variable resistance/voltage signal to the PCM that changes with engine temp. Usually, they have an inverse temp coefficient which means that its resistance goes down as the temp rises (not sure in this case, and don't know what the values should be).
So far as their failing, when you installed them, maybe you overtorqued them in the t'stat housing and damaged them internally (grasping at straws here). The spec for the torque on that sensor is 89-124 lb-in (~7-10 lb-ft). That's not a real high torque. Aside from being electrically or physically abused, there's not a lot you can do to a thermistor to mess it up. When you remove it, does the part that projects into the coolant look OK, or is it all corroded?
Some other modes of failure that come to mind of would be:
1) if the PCM was supplying too much current to the sensor and was damaging it (not likely, the PCM would prolly show other problems as well) or
2) the wiring harness has an intermittant short or open somewhere in it and is either damaging the sensor or is sending erratic readings to the PCM (your '95 is one of the years that COULD have the wiring harness insulation problem + recall, search for "harness") or
3) the sensor's connector on the harness is corroded or somehow else messed up inside and works OK briefly when you disconnect it and then reconnect it but then gets erratic after a period of time. Check the inside of the connector on the harness to see if there's any corrosion or other sign of damage to it.
Hope this helps & good luck!!
