Interviews serve 2 functions.
1. Weeding out the people you surely don't want... that is it answers: does this candidate meet the minimum bar for working here?
2. Providing enough information about a candidate to give them a score... that is it answers: how good is this candidate?
You can "pass" an interview - that is the answer to question 1 is "yes, this person meets our qualifications", but fail in question 2 under conditions where there are more qualified candidates than there are positions. It's really common actually to wait until there are a few qualified candidates before making a hiring decision, rather than just hiring the first person that meets the minimum standards. This bit of hedging allows for making better teams from the available hiring pipeline (on average anyway).