I'm afraid I'm going to have to disagree with you on this one, jay. The more I have talked to people in research the more I get the message that, especially as you move further along in your career, WHO you have done research under becomes incredibly important. After admission to graduate school, in fact, it becomes 10x more important than what such a letter says. Letters of Rec from established contributors to a field of research mean far more than a similarly-lauding letter from a less-established professor at a state school; it is much more comforting for a committee to see that someone with "something to lose", or at least something to look foolish about, would go about writing an overzealous letter of rec.
It also shows that people displayed excellence over a longer period of time. I mean UCSD was a solid institution but I didn't go to a stanford, etc. because I didn't stand out in HS to the extent that I did in college. If someone with the same application as me came from a more prestigous institution, it can also be taken to mean that that student has exhibited excellence for a longer period of time.
That may not seem fair but demonstratively, think of it also as someone who has a 3.7 vs. a 3.9, where the 3.7 person got straight A's for their last 2 years in college. Yeah, at a snapshot in time maybe that candidate may have "evolved" into a better student and one equivalently knowledgeable but any committee will still take the student that has always displayed excellence.
It comes down as well to the same bottom line associated with why the preference for elite undergraduate institutions for regular MD as well. Students who prove that they can "hang" with the best of the best is a sure thing, whereas a super-standout at a lesser-known school can be seen as a risk because it is uncertain how intense the coursework is and who are the peers of that student. The saying that, a bird in the hand is worth two in the bush, is very much a consideration in the huge investment that goes into MSTP admissions decisions. 7/8 years is a long time, and consistency means as much as anything else.
[edit] i may have mistaken your comment, its unclear to me whether "where you're from" means geographically or undergrad, but i typed a crapload so i might as well leave it up