Your ignoring that the rest of the party also has several different passive perceptions. I just played a game with a rogue with 17 passive perception. Also the Wizard is supposed to be in the middle not the back to make sure stuff like that does not happen.
We're talking about level 1 here. 17 Passive Perception is not possible at level 1 unless the Rogue put his highest score into Wisdom,
and took Expertise in Perception. The highest Passive Perception score we can reasonably see at level 1 is 15.
Also, note that the Bugbear doesn't have to beat everyone's passive perception, just the character he's targeting. Only the target has to be surprised.
Let's do the math. Let's crunch the numbers using the pre-gen Wizard.
The bugbear has a 65% chance of sneaking up on the Wizard. It has a 60% chance to hit, and a 72.5% chance of dealing lethal damage (or 100%, if the DM takes the average). All told, that's a 28.3% for the bugbear to assassinate the mage (or 39% if the DM takes the average damage).
Of course, that's all assuming the Wizard is at full hp. At lower hp, That 72.5% very quickly approaches 100%. If the mage is at, say, half hp (so the bugbear only needs 12 damage for a kill), that's a 94.5% chance of dealing lethal on a hit. Factoring in the chance to surprise and the chance to hit, that makes it 36.9% to assassinate.
(I'm rounding to three figures for the sake of sanity)