It's not a bad school by any stretch, but it's not on the same level. Looking at federal grant money (e.g. NSF, reasonable metric for research), U Pitt is at 26 million to CMU's 70 million. Penn is a much closer match at 48 million. Berkeley and Stanford are at 112 and 78 million, for comparison.

You can make 'world class' mean whatever you'd like, but I think most would consider Pitt a solid state-level school, whereas CMU is more competitive nationally.

http://dellweb.bfa.nsf.gov/awdlst2/default.asp

I'm definitely not saying it doesn't matter, but it's not as significant as CMU, and PG's argument seems to be that you benefit from having a really apex research institution for making a startup scene.