You can get many questions wrong and still get a very good score. That's just how the test works.
In terms of how exactly the algorithm works - it would take me several hours and many charts to truly explain, as it's extremely complicated. It is NOT based on percentage correct, and most people answer about 60% of the questions correctly regardless of scoring level. One way to think about it is this: the test is trying to find your 60% level, or the level at which you can answer about 60% of the questions correctly. (This isn't actually what's happening, but it's still a good way of understanding what's happening.)
Why isn't the test looking for your 100% level? Well, if you can answer 100% of the 70th percentile questions correctly, have I just found your maximum scoring level? No, because I don't know whether you can also answer 100% of the 80th percentile questions correctly. If you can, your score should be higher. So looking for the "100% correct" level actually isn't useful on an adaptive test.
But if I see that you can answer all of the 70th percentile Qs and around half or so of the 80th percentile Qs and none of the 90th percentile Qs... well, then I have a pretty solid idea of your scoring level. See how that works?
If you want to know more details about what's really going on, read the Scoring section of our free e-book The GMAT Uncovered. (If you have an account with us, the book is already sitting right there in your student center.) Even this is just a high-level summary because the algorithm's unbelievably complex (and they don't release all of the nitty-gritty details anyway).