The honest to god truth is, it's hard at a high level for little fellas. They can all do the right things technically/tactically and still get beaten.
Now, the kicker is conditioning and good diet long term is a leveller but the Aus Schoolboys program is not in a position to provide that.
The good thing is they'll likely go into their local (or not so local) Super 20s program from here who WILL be in a position to provide that stuff (more time with players due in part to no school). Then, if they're good enough, they'll make Aus 20s.
This isn't the be all and end all of their rugby careers, and the selectors' decisions make some degree of sense.