oblivious, you make a very obvious statement. a really good student stands out everywhere of course and will very likely have a successful career. Hell, some people don't even require a uni degree to be successful. But I think all this is besides the point of OP's question.

The graduate school admission officers I have heard from mentioned that they don't like to take chances like an undergraduate school might. This is because a graduate level education is an investment for the school, they are in many ways paying to have you study there, so they only seek the best and most motivated students. This is what creates the "feeder schools", those undergraduate schools that have a reputation for sending its students to the top graduate schools. The top graduate schools tend to play it safe and select most of their students from among these schools, and then they take the others.

But then of course, I'm talking about engineering where most students do not pay for graduate school. It could be different in different fields.