Yes, merit is a recruitment tool. Among other things, it’s hard to lure 17-year-olds from the coasts to the Midwest if they have other options, and lots of Midwestern schools use merit strategically to overcome that. Leaving aside geography (yes, all other things being equal, I’d pick Vermont scenery/commute over Iowa scenery/commute), the question is not what the motivations are, but how it plays out. Who ends up coming to each school, and what kind of community do they create? Whether that community appeals to you is another matter. It sounds to me as if OP and son are being very thoughtful about that.