In a few years, it won't be an issue. The H bomb will no longer be the H bomb if they don't step up and compete with peer institutions offering merit money to top candidates. They think they have no peers. The movement of top candidates away from them and toward Geffen, JHU, Penn, NYU, etc. in response to big money offers will prove otherwise over time. Once reality sets in, even those with egos needing to be fed will gravitate towards NYU (and other top schools offering merit money) as they become widely recognized as being harder (and consequently, more "prestigious") to get into.
As
@proudofmykids intimated, over time Harvard will become the preferred destination of very wealthy and very needy students, as well as folks with no T10 merit scholarship opportunities. The loss of the other students will surely cost them in the prestige department in the intermediate term. Once this starts happening, my prediction is that Harvard will step up to the plate, but it will take years to play out. JMHO.
Harvard will always be great, but not nearly as great as it has been historically as more and more upper middle class students come to the realization that opportunities are fantastic at all T10s, and the Harvard name has no greater value over other T10s outside their circle of friends and families.