Honestly, I would still apply. BUT I would feel so much more pressure to get into a "prestigious" school. I worked my BUTT off in college, and I did pretty well. However, the applicant pool is really tough and I currently go to a lower tier MD school. It's a great fit and I love it here, and I know that I'm not limited by my school's rank when it comes to getting a good residency. There are students in my class who turned down higher ranked schools because this was a better fit. However, after this policy change, finding a good fit might be less of a priority if you know that the school's prestige factors into your residency opportunities.
And by the way, I'm not saying that STEP is perfect. I'm currently a first year and I have no idea how I'll do. HOWEVER, making STEP pass/fail does not provide a solution to residencies, which cannot possibly read though the thousands of applications they are bombarded with. Residencies will need to find another way to filter through the applications. So now, medical students have additional pressure to boost their research, EC's, etc...Not that we're not already doing that, but at least we know that education is our first priority and checking these other boxes like we had to as pre-meds isn't as vital. So instead of stressing about STEP, students will need to stress about EC's, research, letters of rec even more! And that's on top of their already rigorous courses. AND, students that go to "prestigious" schools will definitely have an upper hand. I suppose if STEP 2 became the new STEP 1, this policy might be for the better. However, the timing is pretty stressful. But like everyone, I'm not completely sure what's going to happen. What I do know though, is that mocking or invalidating people's stress isn't right, because this kind of thing affects an important point in their career...that's all I was saying