Not sure I understand the question. If you are one of 10 nominees for a slot, one person will get that slot. The other 9 go into a national pool and may well still get an appointment. However, instead of being "counted against" the MOC, will be counted against some other source, such as SecNav. However, in order to get a SecNav appointment, you must (I believe) have a nom from another source, such as MOC or Pres.
If you don't get a nom from an MOC and aren't eligible for others (such as Pres., JRTOC, etc.), then you must hope that USNA will give you either a VP nome or a nom from a source that to which you can't apply but which can give appointments. The Supe is one of those sources. However, the number of such noms is very limited and there may not be enough for every LOA recipient who doesn't get a nom.
I have had a candidate without an LOA or a nom still get an appointment. And it had nothing to do with the parents' club.
USNA has to make a judgment about those who receive LOAs. As I mentioned above, they are often handed out early in the process on the basis of limited information. It could be that, once full information is received -- and a candidate didn't get a nom -- that USNA decides this person wasn't as desirable as initially believed.
As for "lesser qualified" candidates -- that's in the eye of the beholder. It's very hard to know everything about another person, unless you're sitting on the nom committee for a given year. Maybe the "better qualified" candidate blew his interview. Maybe the recommendations for the "lesser" candidate were incredibly great. Far be it from me to defend MOCs; however, I think most try to do the right thing.
One USNA grad, from dense populated small state and very competitive for SA's, that I know did not get into NASS, did get an LOA later, then didn't get a nomination.
Did alot of things to find a nom. Finally, scratched and fought through the bureaucracy, and soon got one from another MOC (not his) that did not have a candidate for USNA.
He then proceeded to graduate near the top of his class, as a leader of his class;
He chose USMC, and now 10 years after USNA, two tours in the ME, 3 babies with his USNA sweetheart, he is O-4 and waiting for O-5. Great guy, great Dad, great leader (beloved by his troops).
He knows the meaning of the saying, "If the door is closed, find an open window."
How bad do you want it? That's what those interviews by volunteers for the MOC are trying to find out?
I support the method from LOA's to Nomination interviews and then eval by the Academy's selection committee. It's a tough job leading troops in war or peace. It should be really hard to get an appointment. And, it should be hard to make it through the Academy too.
The waiting between nomination and the appointment decision, blue folder or the TWE, is just "good training", as we used to say (in the USMC) about anything resembling frustration and delay, etc. Get used to waiting.
Blue folder or TWE on April 15th - our nominee did his best. No NASS, no LOA, but he did get a nomination in an extremely competitive area and state.
If it's TWE, he says he will try again next year. Maybe it will be less competitive next year. He considered it and prayed about it before applying.
He wants it bad, and he knows alot about the Academy's life of plebe to firstie. He knows enough about the career in either Navy or USMC. That is what he wants.
God willing, he will get his chance to become one of the very best of America's future military leaders.