I don't believe they're necessarily less physically capable. I do question whether the medical accession standards are keeping pace with our evolving approach to healthcare. I can use my own candidate as an example. He's a three-time state champion athlete, yet due to a contact-sport related concussion many years ago, he was DQ'd by DoDMERB. DS has no residual effects, as demonstrated by later performance: 4+ GPA, NHS, class president, Boys State, etc. etc, but there was no request for AMI - just a straight-up, no questions asked DQ. The typical response when someone hears he was DQ'd is a jaw drop followed by, "What?! Are you serious?!"
Speaking with some degree of knowledge (I am in healthcare), twenty or forty years ago, a lot of coaches wouldn't have questioned the hit that caused the concussion, and random bouts of dizziness in the following weeks would have been shrugged off. Today, we are far more aware of concussions, including proper diagnosis and treatment. That's a good thing, but without question, increased concussion diagnoses = increased concussion DQs. The same can be said for mental health - we are much better at recognizing and treating these issues in children, but every single diagnosis made in the "real world" is an potential DQ in "DoDMERB world."
I fully agree with thoroughly medically vetting candidates, but at what point do the medical accession standards meant to move solid candidates into the system actually become a barrier keeping solid candidates out? And if we are keeping candidates out based on adherence to outdated models, how does that help anyone? I don't have an answer, but given the difficulty meeting enlisted and officer recruitment goals and overall number of disqualified candidates, I believe these are fair questions. It's also fair to point out that my family has no military friends or family to offer thoughts on this, so I don't know the counterarguments.
Apologies for the long post. These are just my random thoughts as a parent, healthcare professional, and taxpayer, watching this all unfold from the passenger seat.