Given all those problems, the rankings still give a general ballpark notion of how schools are viewed relative to eachother. Barpass probably shouldn't be part of ranking at all imho as the point of law school isn't to be a 3-yr barbri course - if anything there's an inverse relationship between bar material covered at a school and bar pass rate - top schools have very high bar pass rates because they attract top students who then study for the bar. Those students would have passed just as easily if they'd skipped law school and gone straight to the bar I think.
In general, its sort of self-perpetuating - the more desirable a school is, the better student's it attracts and the better students it attracts, the better lawyers it produces. Better lawyers make for a better overall reputation and increases the desirability of the school. From my perspective one of the biggest things you purchase when you go to a more competitive school is an, on average, higher quality student body. This makes a big difference wrt networking, learning experience and alumi base. If you are lucky you might also get better professors and a brand name that will make starting your career a lot less work.
Now if anyone can figure out why USNWR cares about number of library books then we'll really make some progress
(my theory is that it creates a barrier to entry for new schools).
Within T1 folks often talk about the T14 which is georgetown and up. These move around a bit, but more or less the T14 are always the same T`14. Whether there's a huge gap between georgetown and whatever school is 15th or not I'm not sure - probably not. Within the T14 the T3 are in their own little group and pretty equivalent wrt opportunities and student body, but very different in culture and feel. The next few - Columbia, NYU and Chicago are also more or less all on the same plane. So while you can't really say with any great confidence that one school is definitely deserving of its exact rank, you can usually say that a group of a few schools are pretty similar and better than another clump.