A virtually infinite number of things can cause symptoms which have some overlap with schizophrenia, and that's why today (I'm not an expert, but I'm assuming what I know of is representative) on intake they classify someone as "schizophreniform" - apparently a fancy way to say "looks like/might be schizophrenia" without committing to anything.
For every person that has a chronic condition, there are going to be many that have one episode and it never recurs. Maybe it was a virus. Maybe they had some weird allergic reaction. Hospitals are never going to know for sure what's wrong with everyone, so the humane thing is not to insist they determine whether the remainder is "real" or not.
Being involuntarily admitted as a psych patient has permanent consequences, and it's uncomfortable to think about someone who doesn't "deserve" the stigma being caught up in it. I think an obsession with this scenario drives the people who crusade against psychiatry. But putting more pressure on medical professionals to always get it right is only liable to make things worse. You can't get better results by applying thumbscrews to people who genuinely try their best to deal with a fundamentally intractable problem.
This did jump out at me:
"then, as now, no scans, no blood tests, no laboratory findings allowed them to distinguish the mad from the sane"
In the 21st century, I believe hospitals in the US typically screen for likely drugs first, when someone appears to have psychotic symptoms. But they also (at least where I know about) do pretty comprehensive blood tests that show clear metabolic abnormalities and then just discard the results when they don't know what it means. So in a sense, sure, there's no blood test for mental symptoms, and yet if positive tests for various things are routinely met with a shrug and typical psychotropic drugs administered, then the statement is misleading.
Keep in mind, a major part of his paper was about how the pseudo-patients were admitted after describing extremely limited and mild symptoms. And a major part of the investigation was determining that, at least in one case, this is untrue; Rosenhan claimed to have extremely severe symptoms, including suicidal ideation.
In other words, it now sounds like the hospitals responded reasonably, but Rosenhan's paper claimed something quite different.
Did Roseanhan claim to have a dr-patient relationship with them. Do they just mean alleged-patients or alleged study subjects?