I may be mistaken but a 2.25 cumulative GPA is the lowest you can have and still graduate. However, you can pass a class with a C-. So if you have two years with C- scores in all classes, while you technically can pass them, you are below the threshold for good standing. If you are an A student with a 4.0 cumulative GPA but have a bad quarter and get C-'s in all of your classes, then you can still pass the quarter and not have to re-mediate, and you will still be in good standing because your GPA cumulatively is above 2.25.
The idea behind this is if you have a bad first year, you will have little buffer to stay in good standing, and you will probably drop out because 1) lack of the GPA buffer, and 2) it is a sign that you won't improve in future course since the material compounds on itself in the following courses.
School isn't that hard. The only things I can see why people would drop out is either because of personal/emotional/health problems or lack of interest. No class was unfair, no class didn't have supplementary books that were available in the library (so if you couldn't learn from the instructor, you could read on your own), no class was harder than difficulty of Board Exams (which in itself wasn't very hard either). Even if you didn't attend class, lectures are video-recorded.
