I beleave if a student fails a test it's always the fault of the instructors, the instructors job is to teach, prepare, evaluate, examine, make judgements on the students behalf. The ulitate goal is to teach a student to defend themselves, this is the judgement instructors have to make, will they, can they do this, but in saying that roman wasn't built in a day.
I also believe that all students must be treated fairly, so I use pre-test, when students have met the required class time and have demonstrated they understand and can preform the material, they are invited to a pre-test, this is not a pass/fail it is a where are you at and what do we need to work on. Pre-test are schedule once pre-month, testing is randum, this way I can tell a student he or she is not ready and give them the reasons why.
Pre-testing is done outside of the normal class time and done with a panel of uppper belts, this also gives some good experience to ranks just below black belt to serve on the panel.
I think this works well, I have been doing this for 7 years now and since only one time I had an issue with failure, I had group of 7 teenagers that didn't take it serious so I stopped the test gave them a 20 minutes leacture, about half way through and gave them 30 days to think it over and re-tested them, they all but one came back and re-tested and did well.