I think this topic may have strayed quite far off from OP's original point which was that super-funding 529s isn't strictly necessary to provide a good education, but since we're on the topic of relative value of schools, I'd like to offer my 2 cents. In my experience, I've been thoroughly convinced that so much of what one gets out of college is down to personal circumstances, including but not limited to what one puts into it.
I went to MIT, yet I almost don't even like mentioning that to people in my personal life because the name sets expectations that I honestly feel I can't or won't live up to. Don't get me wrong, I put in my dues and completed my undergrad with decent enough grades, but I was absolutely not at the top of my peer group there, and my social circle probably didn't even include the very top that were attending. I grew up in a very mediocre public school district where I did get nearly perfect grades in AP classes and graduated valedictorian but otherwise didn't go that far above and beyond with extracurricular projects or studies the way many kids that got into MIT did. I hate to say it but I may have been an affirmative action case, even though I consider myself a pretty normal white male, I'm also half-Hispanic and generally identify as such on forms unless I'm given the option of putting mixed race or something more precise. I was invited to participate in a pre-freshman Summer program they offered which was essentially a condensed version of freshman year classes mostly targeted at underprivileged minorities. Boy, did it kick my butt into gear. I very quickly realized the education they were offering was several levels above what I was used to, and I had to get used to putting in long hours just to stay above water, but I made it.
Sadly, things didn't work out well for everybody in that program. A number of my peers were excellent students but from very disadvantaged backgrounds where they struggled with family issues and whatnot. A significant percentage dropped out before starting freshman year, and a significant percentage of those eventually dropped out in the following years. I knew a number of fellow students who weren't in that program and found they weren't cut out for MIT in their freshman year and had to drop out. Then there were the students who made it through but suffered from severe depression and other issues related to the rigorous studies and pressure from their peers and families. Of course, there were also students who thrived and took advantage of every opportunity. They were the ones you would see devouring books in the library, participating in research programs and internships, taking extra classes to graduate early, etc. Personally, I actually ran into issues because I applied to all kinds of research groups that I just wasn't accepted to, so I never did them, and then found out in senior year that we had a senior project that was supposed to be based on those research efforts, so I had to come up with something quick. I had a few friends who also ran into the same problem. MIT was absolutely great for me, but if I'm being honest, there were so many opportunities and resources that I simply couldn't take advantage of because I was just not at the level of the top students that came from wealthier backgrounds and magnet schools and whatnot. On the one hand, I believe these institutions should be meritocracies, but on the other, I know that I got accepted over many more qualified candidates who probably destroyed my SAT scores and other qualifications. I also got a full ride scholarship because they're completely need-based and my family was quite poor at the time, and I remember quite a few of my wealthier peers' parents being upset that they weren't offered merit-based scholarships. The thing is, if I hadn't been given those opportunities, that level of academic excellence and achievement would have just been a foreign concept to me, and it really lifted me out of a tough situation in high school. I may not have "deserved" those opportunities in the sense that I may not have taken as much advantage of them as some others might have, but I got what I could out of them, and it wasn't always up to me which ones specifically became available. These schools have the names they do because of the many success stories, but as with most things in life, we tend not to hear or talk about the failures or messy cases in between, and there's a lot of survivorship bias.
Nowadays, I have what I consider a decent career, but many of my old classmates have long since eclipsed me, and I'm okay with that. I do what works for me. I have a first child on the way now and I intend to raise her to do what works for her as well. My hope is that she will have much more of a competitive advantage than I did, and I would be thrilled if she surpassed me, but every child is an individual and I can accept if she doesn't, or just pursues something totally different from what I did. I think it's easy to convince ourselves when paying for something as nebulous as a college education that we're buying a future, but it just doesn't work like that. More than anything, we're buying experiences and opportunities, and some intersection of those with what the student brings to the table will be the end result. In my case, I don't think my career is anything I couldn't have gotten from a state school, but I do think the education I received and the respect I developed for rigorous study were better for me as a person than what I would have gotten elsewhere. I also think exposing me to the top tiers of the educational world will pass benefits down to my children, or "change my family tree" as Dave Ramsay would put it, since none of my ancestors graduated from college and I now have an idea of what my children can expect if that's the route they want to go.
I guess to summarize my point and relate it back to OP, saving a bunch of money in a 529 so you can afford to send kids to a university like MIT absolutely does not guarantee that they will get in or even thrive if they do, but I think it does raise the ceiling of what's possible for them. I didn't suddenly become a head of state or anything like that because I went, but if I was absolutely maxing out every opportunity at my institution of choice, it probably would have meant I didn't aim high enough. I remember a high school classmate of mine whose parents couldn't afford to send her anywhere but community college so that's where she went for 2 years, and it was a shame because quite frankly, she was every bit as qualified of a student as I was, and she probably could've taken my place at MIT and done just as well. Obviously this is hypothetical, but if I had to guess, I would say that community college probably didn't match her potential, and I don't think it was a great alternative other than the fact that it was affordable for them. If I can avoid it, I'd rather not put my future children in a position of limiting their school choices based on budget.