I think Whoopi was trying to say in the real audition world you'd only get 8 bars because she followed up with the line about an understudy taking your part on Broadway if you forget the words.

However...I also know this is unrealistic TV, what with the huge production numbers and costumes etc. However, lest anyone think that college musical theatre programs come to your poduck school to personally audition you with full backup singers, costumes, sets and complete songs...uh no. Not even close. Try 16 bars sung to either a taped or live piano part, maybe a short monologue and if they like you, a very short dance number that they teach you. And you either travel to all the schools at your own cost, or go to a large city to participate in Unifieds, (like Chicago or NYC) where a huge number of schools come and rotate you through like cattle. At least Kurt was right not to sing Phantom. You never do that, Wicked, Les Mis and a host of other overly done songs. And all MT kids apply to as many schools as they can because they are wickedly competitive (and expensive).