Tourist,
You are not correct in your information, the RN is not short of pilots, it has an abundance (currently in holdover, like the Air Force) of very average pilots; it needs above average pilots for fast jet training and observers. Observers are not all getting pilot grading, and ‘chopped’ observers are not routinely getting second chances. Higher wastage rates are expensive and can not be justified the aim should be to reduce wastage rates to make the system more efficient.