That's absolutely true and yet, they do make it work out adequately -- not great but adequately. The system culls at Captain level, normally and then it just gets tighter. It works pretty well.
Your suggestion and several other ideas can ameliorate that and approach 'great' -- but the Services, the Congress in particular (and most Americans), do not want great if the cost is lack of equality of access.
Or if the product is an Army that is too competent; they all want good, yes, absolutely -- but not too good. Too good smacks of elitism -- and a potential threat. Seven Days in May and so forth.
The services also do not want a great decline in officer accession numbers, they are more worried about mobilization than they need to be...
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