Good programmers from elite schools are in high demand and can ask for relatively high salaries. When I have been working in companies with big budgets, I can get good programmers from elite schools. When I have been working in companies with smaller budgets, I can't.

However, as you infer, I don't find a big difference in the quality of new graduates based on the school that they went to. Overall they seem to have a very similar gradient of ability. The schools can differ on what they concentrate on, but I have found that good quality programmers suck up everything around them anyway. Whatever they missed at school they have either independently worked on, or are keen to learn after school.

From a hiring point of view, I actually target people from lesser known schools simply because there seems to be a higher percentage of good people available. Obviously from a getting hired perspective, you will have a greater chance of working on a team with a big budget right out of school if you go to an elite school.

One thing I learned when I worked as a teacher: good students need very little in the way of instruction. Point them in a direction and give them freedom to learn. That will give you the best results. In fact I have been fortunate to work with several really marvellous programmers who were self-taught (though I don't recommend that approach for most people -- it's hard to focus and to know what is best to concentrate on).

From my perspective, an elite school is ideal if you are hoping to make contacts and to go to a big famous company right out of school. If your goal is to learn, then you can save a HUGE amount of money by choosing a less prestigious school. I graduated with no debt (admittedly I worked programming for various professors all through school). It takes a pretty big difference in starting salary to offset that kind of advantage.