The way it was explained to me years ago is that every error deducts an amount (probably 10, I don't remember exactly) from the running total of correct charact

The way it was explained to me years ago is that every error deducts an amount (probably 10, I don't remember exactly) from the running total of correct characters typed (WPM was calculated by dividing the number of characters by the time and by a fixed "average" word length (ISTR they used 6 (in Dutch)). So if you type 100 characters and 24 of them are incorrect, the counted total is 100 - 10*24 < 0, independent of the test length. This was in the time of typewriters; computerized text entry did exist but was certainly not ubiquitous. There was no real way to correct mistakes, so I can imagine typing correctly from the beginning was a bigger deal than it is now.