Exactly. One issue is that university has become so expensive in the US that parents and students need to think carefully about the best way to get the best use of such a large financial investment.
Where I work (in high tech, part time only since I am mostly retired) we are seeing and have seen for a few years an increasing number of very excellent students graduating from in-state public universities. We are also seeing students who get an affordable bachelor’s degree (either in-state, or more often in-country when this is not the US) and who then get a master’s degree from either a “highly selective” university or at least a university in the US that is known for their major.
To me, “highly selective private colleges and state flagships” does indeed seem to be where the interest is. If I were the president of a lower ranked private university in the US, I think that I would be worried.
A nurse manager who I know is still hiring largely from mid level in-state public universities (not just the flagship).