I agree with your post- but the phenomenon doesn’t have much to do with “prestige”. The statistics still seem to bear out that most college attending kids in America stay close to home (either really close to home or at least instate). So describing something that is observably true in a handful of high end zip codes and generalizing that cross the country is not realistic.
Even the affluent suburbs of Kansas City, Omaha, Tulsa, Minneapolis, Nashville, Cincinnati, etc. are filled with kids whose “one and done” is the state flagship. And maybe a Hail Mary application to great grandpa’s alma mater, his beloved Dartmouth. The less affluent districts? The flagship IS the prestigious option. And likely mom and dad’s alma mater as well.
The “I applied to 20 colleges but if I don’t get into Penn I don’t know how I can live with myself” phenomenon isn’t nearly as widespread as your analysis makes it out to be.