Besides physical fitness levels being rather low among young people compared to in the past, there's another problem. With mental health therapy being much less stigmatized these days, mental health diagnoses are up substantially. And having been in recruiting, I'm sure you know how that goes over. Like a lead balloon. The military hasn't been able to fully adjust from an era when mental health diagnoses were rare and usually reflected a pretty serious disability.
So lots of people are getting disqualified who probably shouldn't be.