Just got back in front of the computer. Where to start? 
- "The very top students fly the coop in large numbers (and there are a lot of them)." "It's mostly about the money." My take: this is a situation UIUC needs to study/address, BUT there are many factors at play. We should not assume it's because of the lack of aid. (The actual numbers of high stat students who go OOS for financial reasons would be very interesting.....though I have no idea how that could be determined.)
From personal experience (for what that is worth) the top students from my area (suburban, considered affluent) go to OOS schools for a variety of reasons. Often it’s for their intended major and the prestige of the school…MIT, Harvard, Yale, Georgetown, etc.
Others choose to go OOS because they want to get away from Illinois and the cold weather. And even a couple of extremely intelligent students are probably going out of state, because they wish to continue their high level music studies in tandem with their STEM field.
- "It doesn't matter if you or I believe that Purdue is equivalent to UIUC, because it is undeniable that students are turning down UIUC every year to attend Purdue with merit money (and Iowa, Indiana, Michigan State, Minnesota, etc). Ditto those full scholarship schools you refer to as 'not equivalent'. There are many Illinois residents that reject UIUC every year for those schools. This makes them equivalent regardless of whether you or I would make the same choice."
I guess I would agree with this statement if I had personal experience with your Purdue example. The students from our school who went to Purdue for engineering were not accepted to UIUC engineering. They did not want to go DGS and have to earn their way into the College of Engineering. They were very good students, but not at the top of the class. I call this self-selecting out. The same applied to many of my daughter’s friends who eventually went to Indiana, because they were not accepted EA to the College of Business.
I understand that I have focused on engineering and business. As for other majors, I know a few who chose Mizzou, because of its school of journalism…it doesn’t hurt that establishing residency and obtaining in-state tuition rates at Mizzou is very easy.
**** I have to run now, but will try to login later. ****