Well, dropout is a little better than 'fail out' which is something you previously stated. Your information about 'most US graduate students being PhD dropouts' is incorrect; it is a very unfair and wholly unsubstantiated statement. That would completely depend on the university. Here at Berkeley, that may be correct; at a university where you have to get an MS first, though, it is decidedly incorrect. You can get an MS if you aim for it, and you can get it if you leave your PhD program early for whatever reason. Like I said before, though, you can sometimes write up a MS thesis and get an MS even if you're in the PhD program; I had a friend at Illinois who did this. Their program there is only PhD, but he took his first two years of work and wrote up a thesis, which gave him an MS. He then continued and got his PhD--he simply wanted the MS for whatever reason. So, does that make him a PhD dropout? Not at all.
Some programs here give you a BS and an MS after 4 years; I have two friends here in graduate school with MSs from their 'undergraduate' days. They still had to go through the 5 year PhD program, though, as Berkeley didn't honor their MS (because they wanted more money--it had nothing to do with their degrees). Honestly, what it all really boils down to is money. In chemistry, an MS is somewhat of an anomaly because it is treated so differently from university to university, at least here in the US. A BS is fairly standard, and the PhD seems to be standard all over the world, but the MS varies a lot from place to place. Some countries don't even have an MS and have other names for their degrees.