You originally wrote “not a bad deal”. Is it better than being kicked out? Of course. But it’s not something anyone seeks to do and if you were to ask any Cadet or Midshipmen they would most certainly say it’s a punishment. Same with the program where you are sent to the enlisted ranks for a few years, then permitted to come back if recommended. It’s a good learning experience, but not something Cadets and Midshipmen aspire to achieve when they arrive. Yes, the military will be paying for an extra year, but the Cadets are also paying by delaying their commissioning by a year. Over a 20 year career being 12 months behind your peers can add up to a good deal of money.
I would also point out that none of these Cadets had yet to affirm, so this is being done voluntarily and not all Cadets were given this option. Some were expelled.
Finally, my point about PT is that Cadets are given almost four years to pass and are given quite a bit of assistance, so it is hardly the same. If someone can not pass a physical test after that much time and help then they have issues.