I wouldn't think that's true. Logistically, it would make sense attending a campus that has a dental school and/or a research enterprise. Should your student decide he doesn't want to attend dental school, a flagship school would probably have better programs in other fields, stronger alumni network, better facilities, better career center, more student organizations, larger endowment, prestigious students/faculty..better football.
That being said, I study higher education.. go for the cheaper school. Unless you're an alpha that will utilize what a top university(and you peers/faculty at said university) can do for you intellectually, socially, psychologically and emotionally..don't abuse your wallet. I actually happen to know a dentist who went to a school that has now lost its accreditation and gone bankrupt.
People forget that universities offer the modern day mental shaping. Where you go matters not as much as for your wallet, but for your world view.
Pedigree is only for those who can use it. It's about fit after all. Think like an economist, avoid LACs.
I can't comment for dental schools, but historically and traditionally speaking, the dental schools with good pedigree might prefer students with pedigree. That being said, pedigreed students often come up with good greats, DATs, money, LORS and ECs than do other students. I'd say it's the students(your peers), not your university.
