Your logic is off. No one in their right mind believes that all students are judged objectively on every single rotation, particularly elective rotations. There's also a huge difference in preceptors (for goodness sakes, some people have an NP as preceptor, some do outpatient surgery rotations). There's a huge difference in duties for students, from standing around shadowing to being first page. There's nothing about American rotations that's standardized and students aren't judged according to any criteria except what the person grading thinks they earned and the person grading can be a resident, an NP, or a legit attending.
We can argue all day long about how the vast majority of students pass CS. You're absolutely right in saying that. But sometimes, those who fail do so for a reason.