Well this is getting hairy....
To clarify my own position and to kinda-sorta shed some less biased light on what I *believe* SEABEE is getting at, is that a Service Academy, or any institution of higher leaning in general, is not going to be immune to having jerks that go there. It happens, and no selection system will ever be able to fully change that. Someone's going to be an ass. And by an ass, there are those who believe, for whatever reason, someone doesn't belong somewhere. Maybe they're kinda fat or aren't the next Einstein. Or maybe they're a redhead. Some people hate redheads. Happens. But regardless, there are those upperclassmen who get all riled up with the whole "leave my school!!!" and "if I won't do it, who will?" mentality and try to run them out. Sometimes they succeed. Sometimes the Plebe/Knob/Rat/Rook/etc class is particularly close that year and backs their classmate up and helps them out. Sometimes they don't. Different reasons that I'm pretty sure entire social experiments could be or have been conducted on.
99.9% of the time, that upperclassman (or group of underclassmen) is recognized as an immature jackass and is either chastised by his/her own chain of command, or, in the worst cases, kicked out for hazing.
As for the honor code, I've attended countless seminars on honor that preach that the code is meant to instill honor in my school's graduates, and not as a punishment system. But, for the same reasons usually stated above, for some reason people won't like someone (ever heard the phrase "high school never ends"?) and try to get that person caught up in an honor-related scenario. Rarely is someone kicked out, but I've seen folks who's grades and morale have suffered pretty bad from the trial and investigation process.
Is this common? No. But it happens every now and then. It's just high school drama evolved into SA/SMC/College life. And as for the first part about "running out the unworthy", I've known folks on cadre who've done this on purpose as a guise to just get the 4th class to bond and back each other up.
Hope this clarified some things, and as said, my sources are acquaintances and friends at SA's, SMC's, and a few civilian colleges.
Morale of the story: don't piss off your Cadet First Sergeant and Cadre Platoon Leader on Day 00.