The setup for this is...awkward. Scoot doesn't seem to have any of the vibrant energy that she has in the show, and describing cloudsdale as an oppressive reich doesn't really fir for me. Is this supposed to be an alternative universe type thing? Because not allowing fillies to leave until they pass their tests, workers in the factory being insane and disturbed, none of this fits witht eh pony world.

I get that it's supposed to be grimdark, but you need to show me why it's grimdark, not just tell me that it is. What immersion I had was lost at this point:

“Exactly. Praise the Flock.”
“Praise the Flock.”
Heil.

Continuing on, we have Aurora Flash pretty much die. I get that failing is supposed to be a pretty bad thing, but nopony goes to help her? Or even clear the body of the course? There's nothing inherently wrong with writing this kind of thing, but you need to lead up to it by letting us see why the world works this way. Just telling us "Cloudsdale suck and imprisons children" causes more questions than answers.

Continuind on, she apparently hasn't died yet. However, we run into another writing problem:

"Scootaloo felt extremely sad for the yellow Pegasus"

Did she now? And why was that? Scoot seems pretty happy about upholding the Cloudsdale name, whatever that is. Is it only the adults that view failure so harshly? Has Scoot miraculously resisted some sort of brainwashng technique? Obviously not, because she still says things like "Praise the Flock" and Orion seems similarly disturbed by Aurora's accident. Show, don't tell. Also, "Scootaloo’s whole life."

"one leg left raised in the air"
what?

"He stared at the Judges"
Either the Judges are immortal divinities who wear their titles as names, or this was a typo.

“I’d rather be exiled from a place that treats ponies like this than live my life while other’s don’t live theirs.”
Ignoring the typos, this brings up a big plothole that was never addressed: what is keeping the students there? They all have wings, Cloudsdale doesn't even have walls, why are they only allowed to leave once they've passed this test? Pride?

"Oh, Celestia. What do I do? I can’t let everyone I know down... but, I’ll never see Orion again..."
Wait, are they in love now? I thought they were just friends? I mean, this guy didn't even exist a few years ago when the show takes place. Actually, don't you go to this school at a really young age, like in Cutie Mark Chronicles? Scoot can't be THAT much older, and certainly not old enough to be in love with anyone.

"Flutteryshy, an old friend of mine, she’s a Pegasus who lives in Ponyville. She never passed flight school, she never took her test. They’ve never come and taken her away.”"
See my questions above. Also, more typos.

I'm going into skim mode at this point, which means the story has lost my interest. If I were a reader on the blog, this is where I'd close the page.

Alright, I'm not going to rant about this, but it's not very good. The whole thing lacks characterization, and even the big reveal that the manager is Dash feels forced and awkward. I like the idea that something as happy as rainbows comes from somewhere as miserable as this, but this reminds me of a really old children's movie where it tried to be kid-friendly and scary at the same time. You'll notice that you don't really see those around anymore.

There are numerous grammar errors (its/it's, capitalization, word order, etc) but the real problem is the content. I don't know or care about who Orion or Aurora are by the time the story is over, and every other pony is an anonymous judge or roughnecked boss with a slur. How are we supposed to feel bad for Aurora's failure when that failure was the scene that introduced her, for example? Even Scoot doesn't actually do anything noteworthy; the author just tells us what she is thinking periodically. If some of these moments were changed into inner thoughts, it would go a long way towards fixing the show-don't-tell problem.

This is competently written, but competence isn't enough to get a story posted on EqD. It needs to be above average, or at least have nothing glaringly wrong with it. Fix the plotholes, completely rewrite the characters, and remove the reworked song lyrics from between scenes; they break up what little flow the story had going for it.