I looked at programs that had none of their own medical students as a red flag... if the medical students from the school didn't want to stay, there must be something wrong with the program. I also looked at programs that had majority of their own students as a red flag (like, 3 of 6, 4 of 7...) because then that means my chances of getting in were also less.
As a student highly considering staying at my home program, my thought process is very much like socialistMD stated. I know fairly exactly what I am going to get... I spent 6 weeks as a MS3 and 12 weeks as an MS4 (with 2 more weeks coming up) working with these residents and attendings. I know the strengths, weaknesses, what stuff the residents complain about, what they really enjoy. All the other places are big unknowns, and with dedicating 5-7 years at a place, how much can I trust it? I did an away at another program, and that gave me good insight into it, and plan on ranking that one as 1 or 2 as well, so I might be just getting paranoid, but then again, I did a second look at a place that was ranked #1 in my mind and that dropped it nearly off my list...
So, 0 home students in entire program, bad... up to 1-2 a year, good, more than that, badish.