a lathe doesn't wear out that way. It just slowly gets harder and harder to maintain tolerance. Eventually a new machine will be enough better as to make an experienced machinist take less time - they always have to stop and measure as no lathe can give you absolute accuracy, but when the lathe is new it is more predictable how much turning a handle will change things and so you measure before the last operation and adjust it to the right setting vs you measure get closer and measure again.
I run a small machine shop, and while I agree that you're opinion is closer to reality it's absolutely not out of the ordinary for a precision metalworking lathe to fail entirely and be dead weight until repair; it's not all gracefully easing into imprecision.
Older lathes, for example, love to put the AC motor under something that either accumulates or produces chips; you can see why this might be a problem over time. It's not out of the ordinary to require motor re-winds.
