I don't expect class D to instantly crush people, but considering Caitlin got dead last, I wonder what the chances are of there being fairy meddling here, like giving class D a harder statue or something. Fairies are nothing if not mischevious, after all, so if they were made aware of the wager I could see them tweaking things just to see what'd happen.
Like yeah, they're dropouts, but they're also dropouts with the potential to become calamity-level mages in the future. With stuff like Miiko's transformation, that's a bit more nuanced and it's not surprising she still usually sucks before she finds out what makes it "click", but I'd expect a "power above all" type to at least be able to beat C class or something.