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Evidently, students' motivation, ambition, and desire to learn have a much stronger effect on their subsequent success than the average academic ability of their classmates.
I went to UIUC 30 years ago (from NJ) and I knew people who might have been able to get into Northwestern or Chicago, but they didn't even apply because they felt they would have just as good an experience at UIUC, if not better, for a much lower price. Meanwhile, I don't think anyone in the top 20% or so of my HS class even considered Rutgers or any other NJ state school.
I think if you apply to Harvard you by definition have one or more of “motivation, ambition and desire to learn”. You have to write essays, solicit recommendations, pay a fee, etc. The pre-Common App time period covered by the original Dale-Krueger analysis meant that the applications were typed or handwritten, so the effort to apply was non-trivial. Also, Harvard wasn’t ginning up apps from no-hopers to anything like the extent it does today.