I might sound rather arrogant to say "no elite schools produce smarter, more capable professionals." Instead I'm going to say something even more arrogant: most elite schools do not produce more capable professionals, but there is one that does and that's my alma mater, Caltech. So basically Graham is right, except when the school in question is my school!
When I was a freshman at Caltech, I had a very good high school friend who was a freshman at Harvard. She and I would talk on the phone every week. I had also been accepted to Harvard, and a lot of my family and teachers were disappointed that I went to Caltech instead of Harvard. So I was very interested in what life was like there, since I could have gone there.
Anyways, my friend at Harvard told me her schedule one night. My dorm room had a white board on the outside of it. I wrote her schedule on it. Everybody who walked by got a good chuckle out of it. It was humorous for a Caltech student. Why? You could only take four classes at Harvard. You had to get special permission to take more than that. Four classes was the minimum you could take at Caltech. You had to get special permission to take less than that. In amusing mathematical terms Max(Harvard) <= Min(Caltech)
I had another classmate at Caltech who had a tough time there. He felt like it was just too hard, so after his freshman year he transferred to Yale. A year later he transferred back to Caltech. Why? He said that after going to Caltech, Yale was a complete joke. Even though he was miserable at Caltech, he knew he had to go there.
The point of these anecdotes is that Caltech is a unique place. Not everybody who comes out of there is guaranteed for success. Ask Terry about Caltech, and he'll tell you that Google's dominance in search vs. Yahoo is evidence of the inadequacies of a Caltech education. However, Caltech is a tough place to survive. A lot of students don't survive in fact. There's a certain amount of intelligence and even more determination needed to get through. That's why Caltech grads are fundamentally different than grads from other elite schools.