I think you guys are discouraging future applicants. Its really not that bad; just look at the lists of residents at any NE school and you'll find plenty of people from non-Ivy's. I suspect it has less to do with politics but rather w/ programs trying to guess at who is more likely to end up there. So when a NE program looks at a mid-west applicant who has grown up in the midwest and never been to the coast they may think that this applicant is more likely to rank programs in the midwest higher because its closer to home etc. Same for the new yorker who has never left the city - why would a program in the midwest think they could snag a competetive applicant away from Manhattan? So if you're from midwest and want to go to east coast, show it - try to do some rotations there, personalize your personal statement, etc.
I also think that it varies with the faculty of each program. I would guess that if you apply to a program where an influential faculty member (chairman, or program director, etc) went to your medschool or did a residency at your institution your chances probably increase. Unfortunately, people tend to stay in the same geographic area, hence the discrepancy in interview offers.
If our friendly residency coordinator is reading this, maybe they could offer some advice on this.