Of course people get jobs at Google from all over. The key is putting together a great portfolio – giving yourself experience. But for the thousands of kids with little to no experience, there’s absolutely no reason to recruit from 3000 miles away when there’s someone just as good waiting for Google at Berkeley or Stanford.
Are you assuming the same percentage of the class at Michigan and LACs want to go to grad school? Because I seriously doubt that an LAC is better preparation than schools like Michigan or even Ohio State for getting into grad school. These big research schools offer so many opportunities.