One could also call it a bubble. Last as long as it lasts, which is as long as the stakeholders believe in it.
I think your argument doesn't hold. Just because people still believe something to be the case, doesn't mean it really is the case. It being "worth so much to so many groups" just means they believe in it being worth as much. A well formed argument would come up with examples of the brightest hailing from Harvard and perhaps statistics about achievements of former Harvard students.
Only if you look at one aspect of the school: A bubble wouldn't produce a cadre of skilled people that move multiple fields forward. The elite nature of the institution comes from people maintaining that elite status through accomplishment. You don't need a "belief" when the school continually produces many examples of excellence. Thats just hard evidence.
I think your argument doesn't hold. Just because people still believe something to be the case, doesn't mean it really is the case. It being "worth so much to so many groups" just means they believe in it being worth as much. A well formed argument would come up with examples of the brightest hailing from Harvard and perhaps statistics about achievements of former Harvard students.