How many MD applications for top schools are actually realistic?

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I don't think your distinction between UG and med prestige works.

Average Ivy Leaguers/Stanford/MIT can still do very well when applying to Wall Street, consulting and other general business gigs and they can do so without necessarily exposing themselves to rigorous competition in STEM fields. It's well known that such schools grade more rigorously in STEM than they do in the humanities.

Medical students at HMS who excel have more opportunities than those who finish at the bottom.

All of this is why the movement toward eradicating objective measures of merit is a mistake. Institutions will still try to discern more from less qualified candidates; they have to because their capacity to admit/hire isn't infinite. As certain indicia are eliminated or deemphasized, others rise up to take their place and these alternative criteria are not necessarily better.

What's more fair/better in ascertaining residency applications -- Step 1 scores or whether one's residency face pic looks "hot"?

I've honestly got no experience with how the below average students do on wall street. All I know is that for medical admissions, an MIT student with a 3.2 is pretty screwed even though they went to MIT. It's a completely different ball game than top tier medicine.

When you glance at the match lists of places like Hopkins or HMS or Penn, theres a handful of low end outliers, and then theres the 90% that matched a major academic center in their choice of specialty. Often they just stay at their home institution.

If you tried to read one of their match lists and assign who was 25th vs 75th percentile in the class, it's basically guesswork. That's a sharp contrast to the elite feeder undergrads, where upper quartile is going to have a ton of interviews and lower quartile will be lucky to get invited at their public school.