I wouldn't say I'm embarrassed by where I went to school, but I certainly don't like to tell anyone about it.
It shouldn't be contentious because it doesn't matter. It's nothing like as important as the answer to the "most impressive thing you've built or achieved" question. When I'm reading through applications, the school a founder went to barely registers. I'm more interested in whether they've clearly explained what they're doing and whether they seem determined enough to pull it off.
ASU is probably not even ranked in the top 40 for engineering or computer science however Y Combinator judged us correctly. (I hope!)
It's what you've accomplished and your personality that likely makes the difference. For example, you can come from MIT but if you're not committed to building a company and it shows in your attitude you will likely not be accepted.
I wouldn't be surprised if the statistics showed people are from more top-tier schools. People in Y Combinator are probably extremely competitive, intelligent, and/or ambitious people. Why wouldn't they strive to go to the best schools?
Turns out a significant majority of YC founders(80% or so) didn't go to top tier schools.
Of course this could simply be because the applicant pool has 20% applicants coming from top-tier schools and there is no bias in who is picked, but just saying that "80% or so didn't go to top tier schools" doesn't mean much without context.
And of course, in theory those that went to top tier schools should make better candidates, but that doesn't necessarily mean they have an advantage in the interview process because they went to a top tier school, rather that person is just more likely to be a motivated/intelligent individual.
(All generalizations up for debate, of course- merely pointing out that the 80% figure isn't exactly solid evidence for the point).
My advice: if you think you lack in some areas of the application, you need to make up for it in others. For example, if you didn't go to a top-tier school, you might make up for that by having some projects that have traction.