[thenoblesunfish]

I faced a somewhat similar choice when I was accepted to colleges about 20 years ago. I was waitlisted at the most prestigious one (The other "institute of technology"), and thought I might have some chance of getting in, yet it would have been very expensive and I was offered a full ride at one of my lower choices (a good UC but not Berkeley or LA). I took the full ride and had a great time and learned a huge amount. I was one stronger students there so I took lots and lots of interesting classes, didn't stress too much, got two majors and a minor, met lots of people (including my life partner), had no problem getting whatever research experience I wanted. I ended up getting my PhD from that prestigious school I was waitlisted at. Many of the other students in my full ride program did similarly. So, if Z has good faculty/research (and many big US schools do) that will let you get the research experience and letters of rec to give you a shot of getting into MIT as a grad student, seems like a reasonable strategy. Another observation I had when I saw the undergrads at the prestigious school, and met a lot of grad students who had come from MIT, is that there is very specific culture associated with undergrads from those places. That is on the one hand a huge bonus - you're in an exclusive club with brilliant people, and they did some super fun hacks. On the other hand, if for whatever reason you don't fit into that culture (and its toxic elements like "overloading" on courses), then there aren't as many other options - at the big school, you can pick and choose from a much wider range of identities and groups of friends. Good luck! Don't stress too much - those are both great options and either way you will grow a lot from the experience.