Here's a comment I left at Marginal Revolution:
When I was in college, some friends of mine enlisted my help in driving a wealthy Asian foreign student around town so that he could buy furniture and appliances for his dormitory. I tried to help him choose the products with the best value-for-money, but he wasn't interested. He was under the impression that whatever was priced the highest was of the highest quality; so, that's what he bought.
I don't think all Asians are like my old friend here, but I do think that his attitude reflects one widely held about universities. There will always be wealthy and/or high-performing students who go to Harvard simply because it's expensive and hard to get into. And because so many wealthy and/or high-performing students feel this way, it makes Harvard a place filled with wealthy and/or high-performing students.
So Harvard is the best because everyone thinks Harvard is the best. You can get a better and less discriminatory education elsewhere. But what you can't get is a Harvard education.
Apropos of nothing, he's a social experiment you can do at home: Buy two identical necklaces for your wife, and then place one in a Tiffany's box...