What do you mean by "stability test holes kept failing inspection"? If you're referring to geotechnical boreholes, there's nothing to inspect - it's a test of (among other things) soil strength. It's certainly possible to have soft/loose/low-strength soils (soft/loose solis frequently cause the borehole to collapse on itself, that's not unusual) but that doesn't speak toward safety. The building just has to be designed & constructed to account for that, usually by stiffening the soil and/or using a pile foundation.
I’ve always wondered how many other buildings are in the same state.
Given the loose soils and relatively high-water table in Seattle? Pretty much all of them. Structures can be built on soft ground, it just needs to be done right.