Engineering seems to have less degree-bias than some other fields (medical and legal come to mind). Engineering is a career field where its easy to show results (what you've designed, what you've built) so experience quickly trumps academic qualifications. The MIT graduate degree does help for a career in intellectually elite academia/think tank environments (e.g. less than 1% of engineering jobs).
Having worked in silicon valley, in both startups and large companies, I can personally attest to this. At least out here, the culture is very much that of - "can you code ? can you produce work ? can you work with others, as a team ?", when it comes to hiring. Candidates in most companies have to go through fairly intense, grueling coding interviews. The hiring decision really boils down to the candidate's performance in the interview.
I think one area where the MITs and Caltechs may have an advantage over a lesser State U., is that most employers will have career fairs and on-campus interviews in the top 20 schools. They won't bother to go to a lesser UC school (for example). So a candidate who went to UC Davis or UC Irvine (random examples, both are fine State U's in my opinion - have worked with excellent people from both) would need to make the extra effort to get himself/herself into the door.
Another thing in engineering is that, it is not hard to get into a name-brand engineering school for graduate work, after doing well in a lesser university. So one can always get a masters degree (and spend less overall - easy to get assistantships/tuition waivers for engineering masters programs). For most families, a 200K difference per child is pretty major - that's a down payment on a home even in most of silicon valley !
Law and Business seem to be 2 areas where the school matters a lot ? I don't know if it matters that much for medicine (I don't know what medical school my primary care doctor or our pediatrician went to and don't care). When we had to get surgeries, the only thing that mattered is "how many surgeries does this surgeon perform, and how experienced (s)he is".