It also depends on what schools are being compared. Clearly, schools ranked in the top 100 or so are going to have a range of students with some excellent ones, especially those that give out merit awards. A kid with the stats for GT is still going to have academic peers at American. But if that student picks a very small college far from a city that has a 75% admit rate, he may not find students that are passionate about learning. Sounds like the OP’s son has found a good fit.
A state flagship also will almost always have a contingent of kids that are near the top of their class, as cost, convenience, and the desire to cheer for their state team will bring those students to that school. In most states, a top student will find academic peers there.
SAT scores may reflect innate intelligence but certainly do not reflect work ethic or concern about grades. However, it is pretty hard to get a high SAT score without being bright. Kids don’t get over 700 on any section by chance. Most classes, however, do not require a high IQ to be successful. Hard work and diligence can earn As for most students in most majors.