I was a CS dropout who didn't work anywhere near SV when I was hired. The filter (and recruiting pipeline, given the proximity and deep connections to Stanford) tends to correlate with "top CS schools", but I promise you that they're not discarding resumes based on school.
I was a philosophy dropout software engineer who worked on the other side of the country and was aggressively recruited by Palantir a few years back (I passed, mostly not wanting to relocate)... I think they like to keep that top-tier CS count high but still go after engineering talent when they spot it, like any half-sane software shop. The degree thing probably (theoretically?) helps the sales pitch but it's not like an East Coast "white-shoe" firm where anything other than a Harvard MBA is automatic disqualification.
