This is a far-reaching conclusion. That assumes that a) no mistakes can be prevented before they happen for the first time and b) every mistake can be prevented after making it. The truth of either far from obvious. Moreover, it is routine in our culture that sever mistakes are punished - e.g. if you make a mistake of driving drunk and cause harm, you'd probably be punished, not lauded as model citizen since you'd never make the mistake again.
Moreover, if no punishment follows the mistake, why the mistake would not be repeated? What would be the motivation to avoid the repetition of the mistake - do you assume the sympathy for the co-workers would be enough? It is not always a sufficient motivator.
>>> It just seems like a situation that is strictly worse than keeping the current employee.
That assumes employees are a fungible commodity, and if you pay the same money you always get the same one. This is not true - you can find employee which would be more attentive, or one with more experience.
