Well... to be honest, I think your observation is confirmation that it matters. If a field known for poor placement rates is dominated by graduates from three or four schools... well, you know exactly where the privilege is. In fact, I've heard the students (past and present) of certain professors referred to as "family" or "a mafia"! I suspect (in terms of prestige) that the next best thing to studying under such a professor, or attending such a school, is to attach oneself to someone who has.
Well - obviously rank is a touchy subject for anyone associated with a particular school, so I think you're wise not to name names, and I'm going to follow your example. But I think there are a couple of different ways to see if a department "ranks" at a different level (either higher or lower) than the institution it's part of.
The first thing would be placement - does the English department at the school you're looking at regularly (or ever) place Ph.D. graduates at universities ranked higher than that school? (So - if the university is ranked #55, does the English department place students in the 40s and 30s? Or is there a downward trend?) If graduates are getting placed at higher-ranking universities than the one they attended, that suggests the department is stronger than the school as a whole.
The second thing would be faculty - where did they attend graduate school? Who have they published with/list in their book acknowledgements? How often are they cited? If a faculty member at Blah University studied under Professor GodKing Amazing at OMG College, chances are s/he will retain stronger connections and a higher reputation within the field than if s/he came to Blah University with a Ph.D. from Mediocre State - and these connections, of course, will be passed down to his/her students.
In general, I think, the overall rank of a school matters because the money, opportunities, and prestige offered by Schools #1-10 make the process of getting a graduate degree much easier - even in a field like English, where job prospects are dismal. I think most programs are "worth" attending in that they will offer challenges and opportunities to students - but prestige? That's a different story. Privilege is real. But it's a variable that changes with each publication, hire, retirement, etc... pedigrees, like currency, are always in flux.
