Yes, good buoyancy can be taught easily to (some?) novices. A matter of working the LPI well. Not rocket science. I suppose all or some DSD students could do skills NB if asked to. I would guess some could not, if they weren't as comfortable in water beforehand as these DSDs appear to be.
Students have no idea about NB or on the knees prior to their course. If you teach them to be NB, they will assume that is the norm (hence when I shared a pool with an IDC Staff Instructor working with DMCs who were all on their knees, my students thought they were remedial OW students). If on the knees, then they'll think on the knees is the norm. Wherever you set the bar (within reason of course), students will generally accept it and work towards it.
We don't know what work was done with the DSD participants prior to going into the water. There's a lot of work that can be done on dry land to make an easier transition into the water.
Irrelevant side note: I don't think the instructor was at all times close enough to grab each student should any one of them have bolted. That's the old "DSD ratio standards" thing.
Well, given that the two largest agencies allow for rations of 1:4, I'm not seeing that as much of an issue here from assuming that level of risk (which is higher than what I would choose). If students are comfortable and relaxed (the frequency of breaths and amount of exhale is a good indicator), then it comes down to risk management by the instructor. Even though my agency limits Try Scubas to 1:2 (which I think is the right call), in some cases, I would limit it to 1:1 (children, older folks, initially nervous people - that would be addressed before going under).