Not as bad as it sounds. In the 1984 XM9 trials at Aberdeen, the entrant pistols were dropped from a height of 1.2 meters on a hard surface
(drop attitude and surface were unspecified, and I don't know what they were); the test was passed if there was no accidental firing, or degradation of function or safety. Damage to or movement of sights was permissible.
The Walther failed because the rear sight popped out. This was hardly a surprise, given Walther's past history with the P.38 and misguided propensity for putting elegant (and delicate) target components on guns expected to see hard service. The loss of the sight itself was not the problem; with the sight gone, the firing pin retainer and associated parts also took flight, rendering the gun unserviceable.
This could easily have been solved, but a more serious problem was uncovered by the Army. After 7,000 rounds, the pistols (probably two) selected for the endurance test were found to have cracked their frames across the top of both rails, perpendicular to the bore line and in front of the locking insert. Though the Army report concluded that the frame "lacked sufficient strength to withstand firing 7,000 rounds", in fairness to Walther it takes more than a failure of this kind to establish a serious design defect. It should be remembered that this trial was the first to specify NATO-spec ammunition, which is the commercial equivalent of +P or better, and most of the pistols entered by the various manufacturers were originally developed for lighter loads. In factory tests the P88 had far exceeded 7,000 rounds without failure, but the earlier JASSAP trials at Eglin were bitterly criticized for using commercial ammo procured from IVI in Canada, and the Army was determined not to make THAT mistake again.
In any event, the frame cracking was a harbinger of woes to come. The original cracking with NATO ammo could probably have been cured simply by a minor beefing up or a change of material, but after the Army's rejection of Walther's XM9 (these all had 88-prefix s/ns), Walther just could not leave the gun alone for commercial introduction. In rapid succession Ulm made unannounced design and cosmetic changes, some of them inexplicable, most for the worse. First a curved backstrap, then a scalloped slide, and on and on. One could never be sure what the next P88 arriving from the factory would look like--which was death on advertising-- and at around $1,200 per copy, sales were understandably slow.
It was a shame; the gun deserved better. Had it been left in its original XM9 configuration, which had a grip shape reminiscent of the Browning High Power, and an all-business gray parkerized finish, it would have held great promise for that market segment that appreciates classy, functional, expensive things. It was by far the most comfortable and pleasant gun to shoot in its class, which contributed greatly to its fine accuracy. Some engineering attention was needed for a few details, principally the durability of its delicate lockwork, but I really liked the XM9 version. However, nobody at Ulm ever looked back...
It got worse, but it's late, and the rest of that sad story I'll leave for another time.