Maybe. My perception of that story is student 1 learned the material while student 2 blew off the assignment and studied review material before even learning the material the first time. I think this attitude gets people in trouble in third year and beyond. Get the actual assignment done first, then focus on additional things.
Often, these students like student 2 above are the ones in clinical years who are first out the door so they can go do UWorld questions or whatever they're using for shelf prep. They're always so focused on the "high yield" that they don't really learn anything in much depth. Student 1, on the other hand, has already put the time in learning in depth during m1/m2 and really knows and remembers the information; he can get by doing a few World questions when he gets home after busting his tail in the hospital and really learning clinical medicine, getting to know his patients, etc. He can devote himself to the clinical side because he knows he'll ace the shelf without much effort. He doesn't need Step Up to Medicine because he already stepped up months ago.
That said, your student 2 who's right on the edge may be one who's able to step it up and do well clinically. 85 on class exams is not bad and probably pretty near the class average. He's not necessarily poised to jump into superstar territory, but probably has enough medical knowledge to do well if he gets there early and reads like a fiend on his patients. Again, people looking for the 'high yield' shortcuts are not always the people willing to do that.