Some schools do have an explicit preference for their undergrads (I believe Creighton is one of them), some have a given number of spots they can give out, and some schools have a preference for not their undergrads.
This speaks to a bigger idea in academia, that you want diversity in the education of those at your institution. It's the same reason that in many cases, people that earn their Ph. D. once place will be (gently) compelled to go work & get tenure elsewhere, so that the faculty remains heterogeneous.
In this vein, Northwestern doesn't take a lot of it's own undergrads, and the ones it does are through special admission (ie, 7 year BS/MD programs) to avoid inundating it's medical school class. Ah well. Go Cats!