This isn't really true. The ivies are bound by the rules that govern private institutions that receive federal funding. For example, they are not free to disregard Title 9 or Obama's "Dear Colleague" letter without jeopardizing their federal funding. Very recently a bill was introduced with pretty bipartisan support to require all universities that take federal funding to cease favoring legacy admissions. The federal gov't can't force these universities to do this, but they can withhold all federal funding, and that is a very powerful coercive mechanism.

I agree with you strongly that elite schools are not necessary in software engineering, but they make a huge difference in fields like Law.