It also abuses the system by not paying the going short term contractor rate some non tecnicaly savvy companies think that wanting some one to work a 4-6 month contract and only pay you as if you where an employee and not self employed rate.

In the real world there are a lot of people who don't currently have a job. Sure unemployment percentage is low (even if we discount accusations that the percentage is miscounted), but there are still a lot of people looking for a job. When someone doesn't have a job temp-to-hire isn't nearly as risky because if it doesn't work out you are back where you were - sometimes with renewed unemployment benefits.

Actually your downside is a side benefit to employers: you don't risk hard feeling by hiring somebody away from their old job if you latter need to work with them. (these shouldn't happen, but they do)

We are talking about an entry level position with the understanding the candidate's skill set are not truly refined yet in the real world.

Temp to hire wouldn't be so bad, if there was a guarantee from the company that they will either hire you, or replace you with another contractor with the intent to hire them. In that case it is about the same as having a 6-month probationary period.

I wonder if there are statistics on contract to hire positions that don't get hired, and out of those that don't, is it because the person really didn't work out or was there really no intent to hire to begin with?

As a point of reference, where I work they almost always to contract to hire. I've seen a few contractors leave (they found other work), some didn't get converted to full time (those weren't actually to-hire though, and specifically short-term, although in one case a contractor was brought back twice to fill in). But in almost every other case the person was hired eventually (even if it took a couple extra months to push it through HR).

For an entry level position? Nah