There's some truth to what he's saying, in that the most interesting innovation is probably going to happen beyond the web- clean tech, biotech, and life sciences.
Ask someone who works at Google if there was ever a time when in the company's history when a Stanford or Berkeley degree wasn't a major advantage in the hiring process. Even at a small startup, you're probably going to have more faith in an unknown from Stanford than an unknown from Western Kentucky U.
Paul's essay is interesting, but I don't think any of recent academic / sociological studies would confirm his conclusions. In general, the best indicator of one's success is (a) your parent's income and (b) your education. Academic connections open so many more doors and opportunities, even to those who don't have the intelligence and skills to match. An idiot who graduates from an unknown college will probably go nowhere, but one from Stanford may end up as CEO. (Personally, I've seen the latter occur.)