“It’s so crowded nobody goes there anymore”.
I think a more relevant reason relatively few kids apply to MIT is that it is a much more narrowly focused undergrad experience. Not at a CalTech level, but it is not a more comprehensive undergrad experience. Comprehensive: STEM + social sciences + humanities/languages + maybe some sort of pre-professional school or arts angle (business, journalism, theater/music/ visual arts, whatever).
Edit: per the school site, > 91% of those who have declared a major have a primary major in engineering, natural science, physical science or math.