  We compare the half-light circular velocities, V_{1/2}, of dwarf galaxies in
the Local Group to the predicted circular velocity curves of galaxies in the
NIHAO suite of LCDM simulations. We use a subset of 34 simulations in which the
central galaxy has a stellar luminosity in the range 0.5 x 10^5 < L_V < 2 x
10^8 L_{sun}. The NIHAO galaxy simulations reproduce the relation between
stellar mass and halo mass from abundance matching, as well as the observed
half-light size vs luminosity relation. The corresponding dissipationless
simulations over-predict the V_{1/2}, recovering the problem known as too big
to fail (TBTF). By contrast, the NIHAO simulations have expanded dark matter
haloes, and provide an excellent match to the distribution of V_{1/2} for
galaxies with L_V > 2 x 10^6 L_{sun}. For lower luminosities our simulations
predict very little halo response, and tend to over predict the observed
circular velocities. In the context of LCDM, this could signal the increased
stochasticity of star formation in haloes below M_{halo} \sim 10^{10} M_{sun},
or the role of environmental effects. Thus, haloes that are "too big to fail",
do not fail LCDM, but haloes that are "too small to pass" (the galaxy formation
threshold) provide a future test of LCDM.
