Try it out with some numbers.
10100 candidates, 100 are "good".
Suppose you have 2% false positives and 1% false negatives.
You hire 99 good candidates and 200 bad candidates.
Suppose now you have 0.5% false positives and 90% false negatives. (You decreased your false positive rate by 4x but increased your false negative rate by 90x. This is typical for employers who look for every little excuse to reject someone.)
You hire 10 good candidates and 50 bad candidates. Your "good hire" percentage went down, and you're churning through a lot more candidates to meet your hiring quota!
So, "it is better to pass on a good candidate than hire a bad candidate" is FALSE if you wind up being too picky on passing on good candidates.
Assuming you can identify losers and fire them after a year or two (with decent severance to be fair), you're actually better off hiring more leniently.
It's also even worse when you realize that the candidate pool is more like:
10200 candidates, 100 are "good", 100 are "toxic", and the toxic people excel at pretending to be "good".
Also, the rules for hiring are different for a famous employer and a no-name employer. Google and Facebook are going to have everyone competent applying. If you're a no-name startup, you'll be lucky to have 1 or 2 highly skilled candidates in your hiring pool.