That looks a lot like a bad soldering job on the winding-comm connection. From the picture, it looks like a cold solder joint, which would fail pretty quickly at high RPM with some heat added. The arcing on the comm is pretty easily explained by the frag'd winding, which would jam the motor and basically short circuit the comm. I've seen it in industrial motors before, and it ends up looking a lot like that.
I'd chalk it up to a QC problem. Every manufacturer makes a dud from time to time.
-dave