We can all believe whatever we want, but the fact is that it is highly unlikely that the school chose to fail a student in multiple rotations because the attendings just said he was nervous. It's so unlikely that I would bet money it isn't true. I realize this is SDN and schools are often villianized here (and I've villianized certain schools too for shady things they've done), but something like this is so outside the norm and so bizarre that it just doesn't pass the logics test.
Rotation 1: student has good knowledge, but was so nervous and anxious.
School: FAIL!
Rotation 2: student was great, but has anxiety.
School: FAIL!
It just doesn't happen that way. More likely, the way it went down is that the attendings said very critical things about the student, possibly things caused by anxiety, but not solely and exclusively anxiety. Example: "student had such severe anxiety that he always ducked out of rounds and hid in the call room" or "student had such severe anxiety that he could not interview any patients" or "student had such severe anxiety that I cannot grade him on his exam skills because I couldn't observe them."
Those are the types of comments that would make a school want a student to remediate a rotation, not just that he was anxious.