I agree with you. Work hard is needed to cultivate one's talent. But if the from place there is no talent, I do not know what one will cultivate. That is why conservatories have auditions, they want to get the talented kids and then teach and make them work hard to cultivate their exceptional talent. If they do not believe in this, they will just take anybody who wants to learn piano and then teach and make them work hard.
What to cultivate if there's no talent? What about some basic ability?
I don't want to get into the nature/nurture arguement, I've seen it too many times. The way I see it people ought to adopt the most useful attitude, and if someone genuinely wants to play beautiful music or improve their hearing, the only useful way to go about it is to assume that it's entirely possible.
But let's imagine a student with 0 talent, maybe it's a middle aged man with a family whose only music-making was to play a CD. Do you believe he could be taught the basic skills, and perhaps if this hypothetical student puts in enough time and effort, could manage some simple music?
I think that even students with less ability can make beautiful music. It may be simple, but only musicians would know this, and everybody can enjoy beautiful music. Besides there are personal benefits from the very discipline required to study music that are generally beneficient to a persons well being... I see a lot of value in teaching the ungifted, and respect to the teacher who has to work harder for the students.
Conservatories may be different from place to place, I've heard stories of how insanely competitive some schools can be. But I was under the impression that the audition was to make sure the student could handle their curriculum, sort of the same way that a bank wouldn't give anybody a mortgage but first wants to make sure they can afford the payments (a lot of people get PISSED OFF when the bank decines the mortgage that would be the lendees financial ruin

), and also to get a feel for the students abilities and know where to best place them.
So I suppose it's the same thing you said, they have certain standards to be met. Nobody wants to waste their time on somebody who won't put in the effort, and what better way to know a student knows how to work than if they meet a certain standard.
In the end, I don't believe that the cream of the crop is all that matters, that the slower learners have their place too.