* It's partly about where your kids graduated valedictorian with perfect GPAs, etc. I was considered "gifted" in my district, but I would be below average in the greater scheme of things.
* Top 99% of SAT is nothing. I read somewhere that 60% of Ivy applicants have perfect scores.
* It depends on the major they intend to pursue. If it's a popular one, there would be many fewer open slots.
And I agree with you, there's schools just as good, if not better, than the Ivies. You just have to shop around looking for the field you're interested in. For instance, UIUC is a top choice for computer science and engineering, and it's a state-funded school.