Because the more prestigious school, particularly universities, you attend, the more chances/options you get later in life. It's always good to set a goal as high as possible, in terms of education. 
Holy moly, talk about an urban myth. The prestigiousness of a school makes zip difference.
Gil, you have alot to learn my friend.
Are you really in the position to make that kind of a statement?
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Your resume says everything when applying for jobs. When employers see that you have a degree from a prestigious University, 9 times out of 10 they'll be a LOT more willing to hire you. That comes from 2nd-hand experience.

When you think about it, it all comes down to common sense.
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