The biggest thing going for IITs is the extremely high quality of entrants the JEE allows in. Since the times of the original five IITs, the pool of students taking the exams has easily doubled. Assuming intelligence distribution in the population is more or less the same over the thirty-fourty years, the quality of students that would make it through the JEE, with more than double the seats available, would remain more or less the same.
The second thing is resources. Each IIT today has more resources than it did fifty years ago and with increasing private participation they are on the rise. So there isn't a negative impact of reduced resources per IIT.
The requirement in India and the world over of such people has never been more than today.
