I completely agree with Ethical Realist. I have many friends who graduated from HBS, and in my experience it is true that there is something of a perceived "hierarchy" among the schools. That said, I would attend HKS over HBS any day.
First, I WANT to be in the public sector. I left a highly prestigious job in private practice to join the public sector for a reason. I am ambitious and I want to be among the best in my field, but I will not relentlessly pursue achievements that do not mesh with what I ultimately want to accomplish in life. HKS is the best fit for what I want to do, and I would be thrilled to go there for the opportunities it would open up in the area where I want to be.
Second, I want the public sector oriented network that HKS offers. The people likely to look down on me for attending HKS are precisely the people who would look down on me for choosing a lower paying public sector job over a higher grossing job in finance, or the people who might have looked down on me for entering the public sector from a successful private practice career. I am fairly open to many ways of thinking, and this in itself does not phase me. Ironically, I am friends with many people who are likely to make such casual judgments; however, I find that any tendency they may have to condescend is quickly cast aside once they realize they are speaking with their intellectual equals. Being at HBS would help me meet many more people interested in the private sector; I am sure I would quite like them and make many friends, but the networks at HKS would simply be a better fit. Being at HKS would help me meet like-minded people who share similar goals and who are more likely to be in the types of professional circles that my future positions will involve.
HBS is a wonderful school, and I have no doubt I would want to go there if I had wanted to return to the private sector. However, for those of us who are certain of our desire to work in the public sector, HKS is the logical choice.