Eh, I think everyone who frowns on "academic inbreeding" read Surely You're Joking, Mr. Feynman
a few too many times. It seems like everyone in science has a hard on for Dick.
From a student's perspective, I think there can be some compelling reasons to stay at your undergrad (or MS) institution for your PhD. Top among these would be the fact that you know your advisor and already know you get along well as people and as researchers. Moving to a new school is always
a gamble, and I'm sure we've all heard horror stories from colleagues who moved away for a PhD at their dream school, all full of dewey-eyed excitement, only to find out their advisor was kind of a prick.
So if you already know, like, and work well with your advisor, I'd think hard before moving.
That said, here's some food for thought on the "dissenting opinion" side:
- If you don't end up in academia (and make no mistake, 80-90% of us won't), a degree from Stanford will have better name recognition than one from UCSD.
- EE also presents more non-academic jobs than physics.
- Engineers in general, and (I suspect -- feel free to challenge this with statistics) EEs in particular have an easier time finding academic positions than physicists, mainly due to the larger pool of non-academic employers hiring engineering PhDs for high salaries in industry.
Anyway, good luck to ya. It's an enviable dilemma to have