That's a good comment on this student, BEagle, and it sounds like he needs rebriefing (although the heading should be OK), but is there any evidence to extend this to the whole system? Sounds like he is just not using the techniques he has been taught. Not an uncommon fault of private pilots and even instructors I have known.
I am not surprised if he had problems on the PPL theory nav exam. There are 5 questions on radio navigation, and apart from the fact that some of the questions asked have been rather daft, the military tend not to use much radio navigation in elementary training. 48% is rather low, but I suspect he also did little revision and how many of your PPL graduates would do better after a break in training?
My attitude has nothing to do with "it's good enough". Correctly applied by an experienced pilot the MDR techniques are as good as the flight computer. I would not let a new student use them, but a much more experienced or more carefully-trained pilot should be able to use them.