By your logic, we also shouldn’t use Passimian because Slowbro is super common. The fact of the matter is that just because something hard stops you, doesn’t mean it lacks viability. The presence of grass and grass and water types happens to be annoying for opposing Rhydon, for sure, but they do not hurt it’s viability much seeing as Rhydon is used to set up SR, which it does as reliably as anything, and check things like Incineroar, as you mention. Palossand fulfills a different niche for a Stealth Rock setter, which involves checking Fighting types like Passimian, Medicham, and Hariyama while also reliably setting up Stealth Rock. Given this and the pokemon’s other individual specific traits, the VR Council determines that Rhydon has more viability than Palossand and I really do not think that’s too unfair given the prominence of some things Rhydon excels against.