I have never before heard of hubs failing or exploding as I have read here. Cheap hubs usually just have higher friction, don't roll as smooth as higher quality hubs but I've never seen one "fail". Is this "failure" due to skidding?

It is relatively easy to strip a hub if it has been poorly manufactured or the lockring/cog were not properly tightend. I think that's how all of mine have failed. It's not about the bearings, it's about the threads on the hub, usually.

What do you ride?

I have seen hubs (in the past) “explode” but it was not very common and rare today.

Older hubs had a sequential pall engagement that made them roll easier but didn’t distribute all the force to all the palls equally.

I've killed a Suzue Basic hub as it just couldn't cope with skidding. You are right that cheap hubs just can't take the abuse. But then no hub I know has been built with skidding in mind. Chubs maybe?

But this is the best hub failure I've seen: A Campy record track hub which is hardly a 'cheap' hub.

This image is from https://www.sheldonbrown.com/harris/record-track.html

The term exploding refers to the internal palls of a hub breaking so it no longer holds in the drive direction.

What you show in your picture is flange failure due to abuse.

i've 'killed a chub' in that the bearings went on a brand new chub within 6 months. so new bearings etc... but also, when i put a new cog on recently, the threads where definitely a little eaten up. cheap alloy. so i'm just waiting for that day that i tear the cog off of my chub. granted, i don't skid.. but still, constantly slowing down hills puts enough pressure on the cog/threads/hub.

for more info on chubs and bearings, see:
https://www.bikeforums.net/singlespeed-fixed-gear/41630-chub-hubs.html

Once I got a chub when this cha cha blond gave me some tight face and I almost lost my bearings and started to skid.