Yes, but I can count how many times I've had to do this over the 7 years I've been playing on one hand.
Every time this was because the person's gear was so bad it was actually keeping us from progressing. Think healer with an Ironworks weapon still in something like Ala Mhigo where they legitimately can't put out enough healing to keep a tank alive even through single group pulls, or vice versa, the tank with armor so far below level that they die if an enemy just looks at them funny.
If it's an issue of DPS being too low and hitting enrage, then I'm more likely to vote abandon as typically that's an issue of multiple people being too poorly geared as opposed to trying to dismiss every person who is under geared.
To your point, not every dungeon in the game has a minimum item level requirement, so you can end up in situations, especially because of people using things like Palace of the Dead and Heaven on High to level, where a person just doesn't have gear or skill up to par with the content they're trying to take on, but they were allowed to queue in anyway because that item level requirement doesn't keep them out. Your situation, though, seems more like someone upset they couldn't farm their relic items fast enough, and rather than just take one clear as being shorter and move on, made it take even longer by dismissing the person.
Edit : read this backwards.... I mentioned times I initiated the vote dismiss. Though yes, I've also been kicked out of groups for them claiming I wasn't doing enough damage. This was more of an issue back in my Heavensward days before people knew that this kind of behavior could get you banned from the game.
