Journal rejection after 9 months without proper review: why do journal editors allow this sort of rejection? I came to know from a senior in my lab that he once submitted a paper in Applied Mathematics in one of SIAM journals and the review came after 9 months and the review was like the following:


Reviewer 1: The problem is well-motivated and the paper contains original results which deserve to be published.
Reviewer 2: The contribution of the paper does not satisfy the journal standards and should be rejected.


He showed me the reviews from his email. 
Overall the paper got rejected saying that it is not good enough (quality wise, the paper is in the scope of SIAM) for SIAM. My question is that why to keep somebody waiting for 9 months for such rejection. Is the message that "Unless you are completely sure that it is a path-breaking work don't send to SIAM, otherwise you will not get any comment if the paper is rejected and hence it will be time waste ".

I am a PhD student, not aware of much about journals. Sorry if the question is inappropriate.
This is actually pretty common with high-standard journals as the SIAM journals and this is one of the risks you need to know (and your advisor should tell you early enough). 

The SIAM journals are really top notch for applied math,
and the top journals try to maintain a high standard and to only publish papers they deem to be good enough. Unfortunately, it is hard to tell the quality of a paper in short time, even for the editors (although a desk rejection happens). So they send them to reviewers for an in depth check and the state of things is that it takes at least a few month (and nine month used to be standard, but e.g. SIAM if working hard to reduce the time). If the reviews are only slightly non-supportive, rejection is likely. This is what happens at the "upper end" of publication venues.

So, I'd say that your conclusion "Unless you are completely sure that it is a path-breaking work don't send to SIAM, otherwise it will be time waste" is quite accurate. So, unless your advisor is very confident, I would advice newcomers (read PhD students) to aim a little lower in the beginning of their career and aim for faster and slightly less prestigious journals - if their work is great, it will be read and recognized (but don't aim too low, too).

As to the question whether such a reasoning for rejection and little to no comments are common: No, this is not really the norm, but happens from time to time. I would guess that also the editors are not happy with such reviews, but their choice would be 1) to forward the reviews as they are, probably with additional comments from their side, 2) neglecting the reviews and write something on their own (which would really be a large waste of time for everybody) or 3) ask for more comments from the reviewer or more reviews. Action 2) has the downside, that the authors would not even see that at least some reviewer was involved and 3) would take even more time and the only benefit for the author would potentially more detailed feedback. So, the editors go with 1). I can not comment on the question whether such a review leaves a bad impression with the editor and may remove the referee from the "favorite referee list".