ncm: Thanks. Most interesting to hear, besides lurid anecdotes, would be the names of some of the journals involved.
I can think of countless reasons why someone might prefer a second-tier posting to an elite posting: possible to get spouse a job, more freedom and resources when creating your department, better relationship to the university hierarchy, able to see yourself working better with the rest of faculty, and, of course, climate. Reputation of the university is unlikely to be the first consideration of all that many people when weighing up rival offers.
Why Purdue, though? I can see Princeton, though MIT, Stanford & Carnegie Mellon appear to be more attractive.