“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.”
Actually, a higher percentage of the classes at top LACs go to all types of grad school. Much higher. That is because the big research opportunities at the big research schools tend to go to all those thousands of grad students at those big research schools, and the majority of the undergraduate classes are huge. Meanwhile the LAC students have tiny classes, professors who know them, and all of the (admittedly fewer) research opportunities go to undergrads because that’s all there are. Perhaps lecture classes with 300 students is not the optimum way to get to grad school?
Three of the top ten universities for getting into the very top professional schools, places like Yale or Harvard Law, Chicago or Wharton Business, or Johns Hopkins or Harvard Medical, are Williams, Amherst and Swarthmore. The percentage of grads coming out of those schools and going to the elite professional schools is 4 times higher than the percentage that come out of Berkeley or Michigan.
http://inpathways.net/ipcnlibrary/ViewBiblio.aspx?aid=1577
Meanwhile 7 of the top 10 schools for producing PhDs per capita are LACs.
http://www.thecollegesolution.com/the-colleges-where-phds-get-their-start/
10 of the top 20 schools for producing science and engineering PhDs are LACs.
http://www.cbsnews.com/news/top-50-schools-that-produce-science-phds/
And yes, many many professors and CEOs and everything else come from LACs. In pure numbers, not as many from Amherst or Williams as from Michigan or Berkeley, given that Michigan and Berkeley are graduating 18 times as many undergraduates every year. But proportionally, the numbers from Amherst and Williams are much higher. The average outcome for their grads are much better.
In essence, you seem to be making a lot of assumptions about LACs, the quality of their teaching, and the opportunities available to their students that just aren’t very accurate. Writing all those papers in all those small classes opens a lot of doors.