One of my professors convinced me to switch from applying to Master's of Public Policy programs (which I thought would make me more employable) to applying to Sociology PhD programs (which is where my interests truly lie) when he mentioned that, as the baby boomers start to retire, there will be *lots* of job openings in academia.
I'm wary of getting a PhD at a lower-ranked institution, but I'm also wary of people who claim that the only way you'll be successful is to go to a top-ranked school. That being said, I think you're right not to apply to schools with not very good placement rates.