My guess is that they are talking about a program that is Top-20 in a particular field, or even large sub-field, rather than the overall university ranking. This can be quite different than an overall ranking. For example, SUNY Stonebrook and University of Minnesota are powerhouses in topology and combinatorics, respectively, but certainly not amongst the most prestegious in other fields.
With the qualifier of "within a a field", this comment is far from absurd. The exact cut-off, of course, differs from field to field. In Near Eastern Languages, don't waste your time outside the Top-3. In CS, even graduates from programs in the Top-50 have a chance a faculty job.
While I think this is technically true, academics care a great deal about pedigree, in the “he/she went to $FAMOUSLAB, they must be a great scientist” kind of way. The most productive, well-funded, and well-known labs tend to be at the top institutions. I wish it wasn’t this way, but that’s how it is. If you want to maximize your chances of being successful in academia post-PhD, then you have to go to one of these places. For industry, I don’t think it matters as much.
Yes, I forgot that I had a European point of view. Here we don't usually apply to graduate schools, we apply to specific positions where advisors and topics are already chosen, so the reputation of the school itself takes a backseat.
Every qualified person I've heard talk about this said the opposite. "Top-20 school" isn't how professors or large industry labs evaluate a PhD, they will look at the advisor's reputation and the specific lab.
> A masters would end up taking your career to a higher place in the same time you spend on a mediocre phd.
1. This is definitely wrong for someone aiming for research jobs. If we're talking about accumulating money irrespective of the job, then sure, a master is probably better. 2. A "mediocre" PhD is obviously a bad thing career-wise, but if your definition of "mediocre" is "from a non-top-20 school", that definition is absurd.
Maybe your comments stem from going "through one of the worst labs you can find in operation today". Or maybe it's US-specific, I don't know.