MIT IS a fantastic school. I'm not sure what you mean by "irreplaceable". MIT is irreplaceable only in the same sense that Picasso's art is irreplaceable. There's nothing else quite like it, but there's plenty of other great art in the world: Dali, Van Gogh, Vermeer, Calder, etc. If there never was a Picasso, the world would have been fine. It just wouldn't have been as good as a world with Picasso's art in it.
You're also irreplaceable, as is everyone. Since everyone is different.
Re where I work, there are plenty of other labs that do similar things, but none of them seem to do it as well. It used to be part of MIT but eventually decided to be its own thing. Much of of the original sequencing of the human genome was done here when it was part of MIT. Would that have been done at UMass Boston? I think not. Might it eventually have been? Who knows? Would the human genome eventually have been sequenced anyway? I'm sure. How much longer would it have taken? Who knows, but I do know it would have taken longer.
If MIT hadn't existed this lab would not exist. Why do so many biologist want to work here? Because there are few other places like it, and if knowledge on how to cure various diseases comes to fruition, it's likely to happen here. If and when that day comes, how many lives will be saved and how much suffering will be prevented that might otherwise not have been? I don't have any crystal balls, but these things matter.
In addition to going to MIT as a student, I worked at MIT for quite a few years. I got to redesign the computing and network infrastructure for a world famous lab. I wrote software that was essential for the operation of an X-ray telescope. 1,000 peer-reviewed astronomy papers were published using results from the telescope and my software.
I got to adapt brain imaging software to visualize radio astronomy data for star-forming regions of space. Now I work on software to design CRISPRs to help bring on the zombie apocalypse. Or at least I can dream, can't I?
Could I have done all this somewhere else? Who knows? My backup school was Johns Hopkins. They have a cool physics lab. Who knows what might have happened if I'd gone there instead? Would I have done such interesting things at Chapel Hill? Maybe, but I doubt it.
If I had gone to Johns Hopkins, my life would have been different. But it probably would have been just fine. I got into MIT, where I wanted to go. I consider myself lucky. If I'd gone to Johns Hopkins I would also have been fortunate. If Picasso paintings had never existed, I wouldn't have missed them. As I mentioned, there's plenty of other great art. But in that Picasso works do exist, isn't it just so unfair that I can't afford to buy one! I demand a fair and equal distribution of his art, or it's really not a good thing after all!
Your #1 doesn't parse to me. Who said anything about any person being better? MIT choses its student body to be beneficial to itself, the student body, and the world. Considering MIT's success, it seems to be doing a fine job at this. But you would rather fix something that isn't broken?
Re #2, again you want to fix something that isn't broken. How about MIT just admits students via a completely random lottery of everyone who applies? Do you think that would work out well?
Re fundamental superiority, once again I find you clear as mud. I'm certainly not claiming to be fundamentally superior to anyone. I was just lucky enough to be born smart enough to do very well in high school and then lucky enough to be admitted via MIT's secret sauce selection methodology.
If your question is whether or not MIT is fundamentally superior, I don't know about "fundamentally". It's long been considered the world's best engineering school. As it turns out Harvard has better astronomy due, in part, to its close ties to the Smithsonian. I originally went to MIT for astronomy, and if I had only known at the time, I suppose I would have preferred Harvard. Oh, well. And maybe Caltech has better astronomy too. It turns out I settled for third best.
On the other hand, I got to learn SICP before the book was even published, and that changed my life. That couldn't have happened anywhere else.