Yes. A lot of this happened because of educational history. The US had no good research universities until World War II. Before the 1940's, Germany was the world's science powerhouse, until some idiot decided it would be a good idea to kill all of their most brilliant researchers, and they ran over to the US. When they got to the US, they ended up in a small number of schools, which got massive amounts of defense money. This created an overproduction of Ph.D.'s, and in the 1970's, you have young Ph.D.'s leaving Harvard, Princeton and starting departments in the Midwest.Most of the professors, at least in physics and mathematics, received their PhD from a big-name school (Harvard, MIT, Princeton, UCLA etc.).
Looking at a physics department is like looking through a telescope, you are looking back in time. One thing that is the case is that in 1965, physics was *very* concentrated in the big name universities, but then all these Harvard, Princeton, and MIT professors ended up in no-name universities, and then turned them into competitive departments. Personally, I think the future of education is going to be in the major Chinese universities and in online institutions like the University of Phoenix.
Some of it is history. A *lot* of it involves the "old-boy/girl network." Academic hiring tends to be really informal, and so a lot of it involves friends telling friends that a position is open. There is something of a "Harvard mafia" in astrophysics, but the good news is that you don't have to go to Harvard to get connected to it. At Ph.D. graduation ceremony last year, the UT president was talking about how he got his job at UT, and it was through his Harvard connections. But his point was that, we UT grads need to be active and creating *our* networks.I heard Princeton produces the most mathematics professors of any university in the world. Most nobel prize winners, and fields medalists, also come from these big-name universities.
If you got money, you can buy prestige. My Ph.D. alma mater, the University of Texas at Austin, is a pretty good example of that. If you have money and prestige, then you can brainwash people into thinking that you are better.So it can't all be prestige and marketing, they must really be superior in some way. It's probably money.
Also *having* prestige creates it's own problems. The trouble with having prestige is you get fat, lazy, and inflexible, which is why it's essential for MIT to teach people to *hate* prestige, because if you learn to love prestige, then get trapped by it. Even with this hatred, MIT is getting seriously left behind in some areas. Most community colleges are doing cool educational things that MIT just can't.