They aren’t mutually exclusive - but I know my IS chances are much higher, although I believe in my ability to get into one of my OOS dream schools. My fear is getting into an IS school I’m not passionate about and always feeling like I could’ve worked harder next cycle to get into a different one.
I don't fundamentally disagree with you on an emotional level. I can understand how it might feel like, in many ways, you've earned the fantasy. You did all the things you thought you needed to do to get it, and applying to other schools invites the uncomfortable possibility of not reaching what you envisioned for yourself.
The thing is, like I said, nobody knows for sure. Maybe this song-and-dance is all for nothing because you applied to whatever your dream school is and get accepted. But there's also a possibility your dream school just...doesn't give you the American Idol golden buzzer slam-dunk response you're hoping for.
And so the question is, what
then? Whether your dream school does or does not "send you to Hollywood," so to speak, does not preclude you from applying other places where you could be happy. Just in case. The opportunity cost is a year of an attending's salary.
At the end of the day, medical school is just a training program...it's one thing to acknowledge the benefits of prestige, but it is another altogether to throw the baby out with the bathwater and apply exclusively to prestigious schools.
Anyway, since you're really looking to brace yourself for the reality of this process, here's a video of a 3.95/527 applicant not getting a single interview this past cycle: