Earlier quoted context omitted.
While you are right it is a false dichotomy. It isn't completely made up either. Greatness can (often) be achieved through abusively pushing someone to their limits... Like most elite sports athletes... Am I way off base thinking this?
Daniel Kahneman (from his autobiography, but he tells the same story in Thinking, Fast And Slow): > I had the most satisfying Eureka experience of my career while attempting to teach flight instructors that praise is more effective than punishment for promoting skill-learning. When I had finished my enthusiastic speech, one of the most seasoned instructors in the audience raised his hand and made his own short speech…
Is the hypothesis itself wrong? We can test the validity of the hypothesis on all people by testing it on a subset: teachers with expertise in the subject they are teaching. Kahneman hypothesis implies that such teachers reward students only when their level of achievement is higher than it has ever been in the past and punish them whenever their achievement is below their highest level of achievement.
This does not hold true in my experience of my own teachers. I was occasionally praised for doing well or punished (in some sense) for doing badly but much more often when I spoke with my teachers they remembered trends: I started bad and got better slowly, I started off well but seemed to get lazy, etc.
In my experience teaching first year math courses I would only automatically remember individual achievements if they were very surprising. For example, a student who was failing suddenly moving into the top of the class on a test.
I think people have a natural tendency to focus on these kind of outlying events and assign them special significance that they may not actually have. Although Kahneman does not mention this tendency his hypothesis suggests he also believes this.
But compared to the interesting outlying events the vast majority of student's achievements are not memorable. This means a teacher will not automatically remember them. If the teacher does not choose to remember them then they will be forgotten.
Since a teacher's capacity to remember is limited, trying to remember all student's achievements or failures was low on my priority list. Knowing a student's general trajectory lets you tailor your approach when working with them on a problem whereas individual achievements or failures are usually just noise. Other teachers I knew seemed to feel the same way.
Of course my own experience is only a data point against Kaneman's hypothesis about people in general. I am sure there could be types of teaching environments where something like what he is suggesting could be true. If the performance of the students on a particular test were tied to the teacher's compensation or the opinion of people they respect or who have power over them then I can see how a student's performance on that test would get highest priority in a teacher's mind and this could lead to reactions of the kind Kaneman describes.