Leaving aside all ethical questions, it is baffling and sad to see how un-scientific an approach to hiring and staffing we take. This is about pride and self-image; there's zero reason to believe that restricting your hiring to certain universities, certain previous roles, etc. gets you a more effective engineering team. (And I say this as an MIT graduate in software engineering proper.) If anything, being willing to hire from more universities and more career paths gets you different forms of experience, avoiding an engineering monoculture, for less money and time than it takes to participate in the top-university recruiting extravagance or hire away those engineers already in demand.
One of the particularly unfortunate things about the current software industry is that it makes these sorts of policies non-testable. Companies are supposed to compete, but a number of factors, from the wildly inconsistent availability of venture funding, to network effects, to personal connections between founders and people already established in the industry, means the market is remarkably inefficient at determining how productive a company actually was. The fact that Twitter did as well as it did conveys zero information about how much better it could have done. There are so many obvious technical things they screwed up (developer relations, notably) and succeeded despite those failures; it's equally likely that they succeeded despite many of their non-technical decisions instead of because of them.