(I'm British, and I don't have any firsthand experience of the American higher education system.)
Transferring credits between universities is also a huge crapshoot, as you never know whether school A will accept your classes at school B.
There's also a classic misconception of assuming the general public is stupider than they actually are. I looked up the transfer policies and talked to guidance counselors and got approval to transfer courses before I took my first class... Everything turned out OK. Other than the whole switching majors three times, and even that turned out OK in the end.
When transfers are admitted every year to my school (usually just 5-10) there's a writeup in the school paper about them. Without fail they all a) were accepted here, but chose to go to a similar/competing school like Princeton and b) are exceptionally accomplished at a young age.
In general, it might not quite be the case that it's (particularly) hard to transfer from a state school to an elite one. It's just the universe of people going to more democratic schools are distinct from those going to elite schools; in other words, if you took a random sampling of students who have no issues getting into top schools straight from high school and put them in community colleges for two years, they would have no issue transferring to a top school afterwards.
Every transfer at Harvard I know of was admitted to Harvard, but just decided to go elsewhere before deciding Harvard was the right choice.
In theory, that's great, but in practice the CC is underfunded and there aren't enough classes offered, so it takes 3, or even 4 years, to get into all the classes required for the transfer. Upon getting into UCLA they find their department won't accept some of their CC classes for credit because they weren't rigorous enough, or that they need some prereqs that weren't offered at the CC, and it will actually take 3 years at the UC campus to graduate. They enter the workforce 2 years after their peers who went straight to 4 year universities and the 3 years of CC is easily more expensive than the 1 year of UC tuition saved, especially considering they fed and housed themselves for 2 extra years. Their lifetime earnings drop or they have to retire later.
None of this is their fault, either: The CC eagerly offers the few students who successfully (and luckily) navigated the class scheduling and credit transferring bureaucracy as the mode, and a 17 year old kid -- likely the first in their family to attend college -- isn't equipped to evaluate those claims. After all, why would they distrust the CC? They're told they'll save money and graduate at the same time, with the same degree, as their friends who went straight to UCLA and there's no reason for them to doubt that.
While I'm sure many CCs are perfectly good places to spend the first 2 years of college, there are at least some tar pits out there. It's a real shame, too.