The question is whether you should filter out a clearly capable person because something went wrong once. If you do, you're simply not optimizing for the right thing.

What I mean is that I'd want to hear the story. If the guy's wife died, that's one thing. If he got addicted to heroin, that's another. If I'm given no story, then I'll go with the undergrad. But I don't disagree with the rest of your assessment.

Generally speaking, the "softer" the subject -- the fewer objective measures of competence -- the greater the reliance on pure status games, i.e. academic snobbery.

Fair enough.