I think Touch n Oops has hit on the nub of it.
Why should a paying cadet be treated any differently from an employed cadet? Would someone who the company was paying for have been allowed to get to this stage following performances like that?
Would someone being paid be given multiple chances in the same way?
Unlikely, obviously everyone has a bad day on occasion, but where there is multiple bits of evidence that point to the pilot not reaching the required standard, then it is easier to chop someone who hasn't put themselves in hock.
TC's are human and will realise the sacrifice that someone has made financially to get to that stage and it takes a hard person to pull the rug out from someone. Especially if you have got to know them through the training.
It's easier to just let it go and let someone further down the line deal with the employability of this person. You might say to your HR people "don't employ" but all that happens is that when this person gets a job with another airline on the basis that have been line trained and are supposedly a more "reliable product", their short comings have just been swept under the carpet.
The day training became a cut cost item in aviation, we started on a very slippery slope and it is nothing short of amazing and a testament to quality of most pilots that nothing serious has happened so far. Swiss cheese anyone?