If the most qualified candidate bombed the interview, they wouldn’t get an offer this time, but probably would in the next interview when their performance reverts to their average level of competence.
Some companies place rejected candidates on de facto blacklists to avoid wasting time with a recruitment process that's likely to be rejected.
This is particularly common when the hiring process is delegated to third-party HR/recruitment services, where recruiters are averse to the possibility of appearing ineffective in the eyes of their client.
That’s that company’s choice of how to conduct recruiting. Other (perhaps more competitive) companies say “you can re-apply after N months.”
I have a hard time seeing that as improperly discriminatory any more than departed employees having an “eligible for re-hire” bit set to false.
“Plenty of other fish in the sea” works both ways.
Maybe turn the question around. If someone bombed the interview, is there some additional process a company should go through to ensure they aren’t in fact the best candidate? What form might that type of inquiry take and why wouldn’t we just use that instead of the interview process for the company’s purpose in selection?
This is particularly common when the hiring process is delegated to third-party HR/recruitment services, where recruiters are averse to the possibility of appearing ineffective in the eyes of their client.