Is it broken or working like it's supposed to? I've never understood the desire of scientists to rank and self-segregate themselves into "elite" and "Tumbleweed

Is it broken or working like it's supposed to? I've never understood the desire of scientists to rank and self-segregate themselves into "elite" and "Tumbleweed State". First, it's not in scientist's self interest to give up chances at career progression to an elite cabal of admissions panels. Secondly, it actively restricts the flow of ideas to artificially limit the pool of respected scientists to only those people at a few institutions, even while the total number of scientists continues to grow. Finally, science is science, whether you're in Wichita Kansas or Cambridge Massachusetts. Why is it bad that scientists are judged on their objective output rather than the place they went to school?