Yes, any property will *probably* be paid off in time (barring major market changes or the house becoming uninhabitable or something), but the 1% rule takes that into account. It's not a hard and fast rule, but a rule of thumb meant to take into account the risks, work, and other downsides of real estate investing.
When you invest in real estate you are taking on a couple of different kinds of risk:
* the price of the house could drop for any number of different reasons
* you still have to keep making mortgage payments even when the property is vacant and not earning you any money
* you are on the hook for any major repairs, which can run thousands of dollars
Real estate investing is generally more work than, for example, index investing - you need to identify and vet properties to buy, maintain them, and find and vet tenants to occupy the properties.
Also the transaction costs are very large (mortgage origination fees, realtor fees, etc.), and the wealth is not particularly liquid (you have to pay all those realtor fees if you want to convert the house into cash, and it might take months).
The idea behind the 1% rule is that a property is probably worth the risk, work, transaction fees, etc. if it meets the 1% rule. People make money all the time in sub-optimal investments. Buying a non-1% property isn't, like, a one-way ticket to bankruptcy. It just might not be the best thing you can do with your money.