My only disagreement is with your last statement that once you "go above 700 in a subject area, scoring higher really makes no difference." All other things being equal, I think that a 2400 (800 x 3) or even a 2250 (700 x 3) might garner an applicant a better chance than an applicant with a 2100 (700 x 3) of gaining admission to an elite college.
Yes, as MIT admissions statistics confirm
http://mitadmissions.org/apply/process/stats . The increase in the admissions rate going from the 700-740 range to the 750-800 range is larger than the increase going from 650-690 to 700-740.
