Do you care of expound on this one a little bit sir?
Sure.
So MPTS was designed by the Air Force to eliminate subjective grading. (Bear with me here.) CTS is the standard, which is why you see 4s as MIF towards the end of stages. Here's the rub: what constitutes a 3 for a particular maneuver? How about a 5? (2 is pretty easy, and 2s are rare.) MPTS defines 3s, and 5s a bit loosely and gives IPs a good bit of wiggle room as to when to give them and when to withhold them. So what you actually end up with is the old "average" system - except under MPTS you get more allowable UNSATs and an unlimited number of double-below "marginal" flights. (SMS notwithstanding, because SMS is worthless.)
How could this be fixed? Well, it's slowly changing as the current generation of IPs dealt with MPTS all throughout flight school - but they did so when it was literally being applied as 4 = "average," so scores were skewed relative to how studs actually performed. I think in the future you'll start to see more "proper" application of MPTS - or you'll see it go by the wayside as the Navy/MC says "fuck this shit."
"But squorch," you say, "what about NSS? Isn't there a 35 NSS cutoff?" Yes and no. MPTS itself has no provision for automatic attrition of <35 NSSs - the lowest 7% of studs - but it does provide for command-directed and wing-level reviews of such students. I've only seen one Navy guy like that attrite and his attitude was extremely shitty. Contrast that with Marines, who immediately go to the MATSG CO for finishing with <35 NSS. When Redman was MATSG CO, I did not see any Marines with low NSSs wing, and I fully agree with that philosophy.
Unfortunately, as RLSO alluded to, fiscal constraints allow for a limited number of attrites at each level of training, thereby making everything dependent on earlier and earlier screening. This is the rationale behind programs like IFS and the emphasis on technical majors at ROTC school - weed out the non-hackers early and you can reduce attrition rates, thereby saving money? Except it's still hard to effectively screen folks that early for aviation aptitude, and sometimes we just don't know that you suck until you're thrown behind hundreds of horsepower and told "okay, you have the controls."
Combine the more squishy nature of MPTS with current fiscal realities and the pressures of ever smaller tolerances in training flow and you get what I talked about to start with: it's easier these days for marginal students to squeak through.