A lot of these places survive, because the general public doesn't know a damn thing about quality food. I've seen Ramsey send shit back that most people would have no problem with. Basic shit. Like, can the average joe tell the difference between fresh and frozen? Microwaved pasta, from freshly made? Probably not. Most people don't have a great pallet, so a lot of restaurants get away with serving you shit. If it's presented well enough and tastes alright, most won't care to complain.
Only thing most average people can judge, is if the food is rotten, stale, raw, or overcooked. Avoid that shit, and you can probably get by.
A lot of it is scripted, but I wouldn't doubt that a lot of these owners don't know the level of perfection Ramsey is used to, regardless. Even if these restaurants tried their very best with what the owner provided them with, they'd still be dumps to Ramsey and he could turn it into an episode.
I stopped watching the Hotel show, after the diarrhea lady. That was a bit too much.