You failed to communicate your expectations to your contractor, and they failed to enquire about them.

Needs a rip out and redo.

" are my expectations too high or did the contractor do a poor job on it? "

No and Yes. That is not really wainscot (picky I know but the incorrect terminology), but a T&G Vee-joint board. However it happen, still a poor job of selecting, prepping and finishing of the wood.

I agree, very poor job, I would want it all replaced.

Looks good,,,,,,,, providing if it was supposed to be done with used material.

What did you decide to do re: the issues shown in the photos you posted of the T&G v joint board that you had installed by a contractor?

The wood that has been installed looks pretty "beat up" - seems like a better grade of wood should have been used for the project + it should have been sanded + wood filler used to fix any issues + cover nail holes.

The finish (paint) on the wood looks like someone used regular paint vs. a professional finish (professionals use products other than SW/BM/etc. paint that homeowners purchase). Also, there are defects in the wood that still show + you can see where some caulking (or maybe wood filler) was used to fill in spots - but it was not sanded down to be smooth before it was painted. Lastly, if a sprayer was used, it would look better (although maybe the $ paid to have the project completed wasn't enough to have all the prep work required in order to have a sprayer used inside a house that has already been built).

I've seen some similar DIY work that looked much better than what you've paid someone to do. I'd expect it to be re-done!