Sure. I see it all the time. Divers (with c-cards) and students on their check out dives who are over weighted, who have no concept of buoyancy control, who bounce off the bottom, who flail their arms, who bicycle kick, who panic if they get water in their mask....the examples are almost endless. These folks are not ready to leave the pool. Their incompetence is usually the result of instructors following poor standards. Dive skills are not hard to master, but most folks require much better instruction than they receive.
We had a guy in our class that, IMNSHO, should not have been passed. He barely managed the pool swim. I think he did okay on the classroom tests, but in the pool portion, it seemed he wasn't paying attention most of the time. On numerous exercises, the instructor had to explain to him again what was required, and even then, several times he acted clueless in the water.
They rotated us around so we'd get experience with different dive buddies, and both my wife and I came to the same conclusion about this guy: We NEVER, EVER, wanted to be a dive buddy with him on a real dive. My wife was partnered with him for the shared-air exercise, and she had to pretty much do everything on both sides of the exercise. He darn near hung there like a bump on a log, didn't do his part of the communication, and had to be pulled through everything. The only reason my wife did as much as she did was concern that she'd fail the exercise if she didn't drag him through.
If he was barely managing to get through controlled exercises in the pool, I don't want to think about what he would do faced with a real open-water mishap. If he wasn't paying attention to the instructor during the pool portions of the course, how could we expect him to pay attention to pre-dive briefings from the Dive Master?
I don't know that we need "Drill Sergeant" mentality in the instructors, but I do think instructors need to move a little more away from the "nice guy, encourager" attitude and remember that a person should NOT be passed if they're not truly ready.
I never heard how he did on the OW exercises, but it would not surprise me to learn he eventually got his Cert card. Were I on a dive boat, and he my only choice for dive buddy, I'd scrub the dive. I'm still a novice myself, and I'm not qualified yet to step in for an instructor with someone who didn't pay attention in class - particularly if my life is going to depend on it.