It's true that keeping on terrible employees is worse than firing them, but that's the answer to a different question. The question at hand is should you opt for a system you know is going to involve a lot of firing fast, or do your best to avoid bad hires even at the cost of a higher false negative rate?
Hiring and firing are expensive in a whole lot of different ways, but it takes time and effort to get right, and you’ll never get it right every time. So actually using the probationary period properly, and getting good at firing people are things you’ll have to do anyway.