I come from a different generation where people aren't all assumed to be equally smart and equally talented. So I very much subscribe to the idea that some people are clearly smarter and more talented than others.

There are definitely A players who are demotivated and become B players. But the point of "Only hire A players! Fire B players!" is simply due to the fact that most startups can't afford to sit around and move demotivated employees around until they find a good fit. It's also the same reason why many startups don't train people for jobs and instead expect them to be already experienced. The number 1 currency for startups is time, and if they don't get traction quickly, the entire company will falter. Wasting time and money on an employee that isn't a good fit, regardless of how intrinsically talented they are doesn't make sense, because the entire survival of the company demands that everyone is performing at top levels for a relatively short period of time.

As the company grows and turns a profit, and if it can afford to invest in employees, it might make more sense to try to elevate the performance of their B players by moving them around, etc. But that requires a more mature company.