I think BoneBlaster has it right.
Also, the reason students with bad paper files are accepted for sub-Is is simple: there isn't enough available information to properly screen students at the time the rotation schedules are being set up. I've been told that many, if not most, programs don't even bother screening.
Face it--a good rotation can tip the scales in your favor, but it is crazy to expect it to offset a terrible record at your home institution. If you don't have the paper file to back up your stellar sub-I performance, then you should expect to be disappointed, unfortunately.