1. DO school is essentially MD school lite
No. Osteopathic school curriculum is the same as allopathic, except osteopathic students take an additional class. It is the same rigor, and graduates of both MD and DO have the same end point: A doctor.
2. All DO grads go into primary care.
Wrong. More so than MD grads, but I've seen/know of/met DO vascular surgeons, neurosurgeons, dermatologists, plastic surgeons, general surgeons, anesthesiologists, etc.
3. Everyone at a DO school just didn't get into MD school.
I have a friend from undergrad who had a 4.0 (Exactly. He showed me his transcript) with exceptional MCAT scores who got into a few MD and a few DO schools. He went to a DO school because he wanted to stay close to home. It was also the cheapest option. He is one of the smartest people I know.
4. Osteopathic doctors almost always work in rural regions.
No. Osteopathic doctors work at academic medical centers, in large cities, in rural towns, and in specialty centers. Wherever you can find MDs, you can probably find DOs too.
5. "Prestigious" places won't hire osteopathic doctors.
Tell that to the 100 osteopathic doctors working at the Cleveland clinic. Maybe one of the former surgeon generals of the army would like to hear that too. Maybe the current chief medical officer for the US Coast Guard. Also some of the olympic chief medical officers.