I mean, personally I think many of us who joined in were of good enough caliber to get the rank. But there was only 8 slots, and 8 were filled quite easily.
Those that did not get the rank, did not lose. They will retain points going into next test. Who knows, maybe the chunin exams is not the only way to get a promotion?
Those that want it, will seek it out, regardless of failure, or being passed on.