I generally agree about the selection at high school level. If you are picked out for a top program at age 14-16 then you are in a great position. But for the mid and lower tier programs I think it’s much more complex.
For lower tier stuff it basically comes down to money (they have none, their dancers are very badly paid if at all and they churn through them until they can’t afford to continue dancing).
For mid-tier programs, the auditions are fiercely competitive but there’s a chance of a job if you get into somewhere as a trainee that likes you and you continue to improve. So many dancers drop out due to injury, finances or just unwillingness to put up with the sheer physical pain and exhaustion, that it’s not just the most talented that make it through.
My D was never the star in HS or college, at college she was more like top quarter rather than top 5%. But she worked harder than anyone else and still does. Which means she keeps improving and everyone likes her. And her current company likes mature dancers (mostly college graduates) who will stay for the rest of their career. Hopefully she’ll be the one selected (out of 7) for a main company position this year, but we really don’t know. And open auditions are brutal, so that’s unlikely to work out as an alternative.