What about the statement seems so far fetched? Spekkio asked what mechanisms were in place that would/should have weeded her out. If her superiors were doing their jobs or working with any kind of integrity, this kind of stuff would have found its way into a fitrep. Not rocket science.
There are plenty of examples of people who get command, promoted, whatever within the Navy and Outside World who seeminlgy don't belong in those positions based on an assessment of their competence, sanity, personality, or some other metric. But that metric is not necessarily the one that the organization is looking at.
Everyone is well versed in the fact that "leadership is not a popularity contest", so we shouldn't be surprised when some folks who get results aren't necessarily well liked. Throughout her career she was doing something right to get the correct paper that got her a major command billet. There are any number of scenarios that could explain how her demeanor was overlooked/ignored/etc.
Ideally, we'd all love to have perfect skippers who are well loved at all levels and get the job done. It's not always going to be the case.
On a semi-related note, more often than not, you do most of the writing on your own fitrep. Of course everything I write is going to be self-lauding and tell the board how awesome I am.