Interestingly, I think this phenomenon goes both ways. It can hurt smaller schools on the periphery of bigger cities, as kids get moved to bigger schools with more options/opportunities.
But it can also help in "bedroom communities". Think Norwalk, Alburnett, Waukee, CCA that have just blown up - those used to be tiny1A schools not that long ago.
End of the day, parents who care will try to move their kids to the best school they can. In Cedar Rapids, for a long time you wanted to move your kids to Prairie. Then it was Kennedy. Now it's Linn-Mar. Those are perceived as "best" for whatever reason over time. And if none of those work, or you want a smaller school for whatever reason - Alburnett, Solon, Benton Comm are available too.