I think what we're not considering is the behavior of the kids when they were supposed to be learning the song and dance numbers. I remember one little girl in particular who had a great voice, but kept acting up when she was supposed to be learning. She got cut. I imagine that a lot of those kids have outgoing personalities and are used to being the class clown or the center of attention. I would not want to have to teach a class like that.
The dance instructor said Canyon was the most improved dancer, so they probably think they can work with him on his singing as well. Besides, he really is a cutie. They need to find teachable kids with enough talent, not necessarily the most talented kids.
After all, the target audience for this group is "tweens" - the same people who keep buying Mary Kate and Ashley Olsen music videos and those two can't sing a note.