I graduated from a private school over 20 years ago that was about 30K per year and ended up with about 20K in loans which I paid off shortly after I finished graduate school. Personally I doubt I would have gotten into the graduate school that I did if I hadn't gone there and I would have not likely gotten an academic position had I not gone to the quality of graduate school I did where the quality of my PhD advisor helped me get a good post-doc position. That said, academic positions are different than most other positions. I agree with you for the most part though, how well you do in school is the most important thing for most people.
I can easily see how the school really matters when talking about a career in academia. I have a relative who is considered among the best in the field of mathmatics and physics. That wouldn't be true had he gone to ____ State University instead of Harvard and Princeton.