Is it, though? There are so many other ways that someone might not be a good "fit." Maybe you found another, slightly better candidate who is willing to accept a lower offer. Maybe a manager or individual contributor feels that their position is threatened by the candidate. Maybe they don't attend weekly happy hour.

I can’t imagine firing a competent employee for any of those reasons. Hiring (and firing) an employee involves a lot of work and is a big onvestment. You don’t throw that all away to roll the dice on someone who might be incrementally better.

Yes but being a FTE doesn't shield you from that sort of thing either.