I don't understand the value of failing students in this way. At medical school I failed some exams but was allowed to retake them, and received coaching for one of the re-takes. (Relax, I had to prove I'd learned the material before I could work with patients.)

At my brother's economics PhD, however, the school (can you guess which it is) took pride in failing 50% of the class. Why? And when the students are going into so much debt, why is this appropriate? Pick students who can pass your exams in reasonable numbers, reject those who cannot, and then invest in teaching the ones you chose.

Bravado over failing students to demonstrate how difficult your course is is a waste of human talent.