A constrained elite does seem useful within an organization. I like the idea of distinguishing those engineers who go above and beyond and really create something new. However it can also become a gerontocracy easily and can limit the adoption of innovative ideas in the long run.
The problem I have with these sorts of social structures is that it assumes that one person out of a hundred is some how "gifted." After reading Coders at Work and listening to interviews with "gifted" artists I think most of these people do not in fact consider themselves such. AFAIK they just worked really hard and the right people at the right time took notice. I assume this is why I often hear these "gifted," people say they feel really lucky to be in the position they're in -- luck did have a small role in it and that seems to be where the "gifted," term comes from. The important part is the hard work these people put into improving themselves, their skills, and the state of the art.
However these DE titles can have a negative passive-impact on hiring practices. In order to avoid, "bozos," organizations will try to, "only hire the best." However the "best," is a highly subjective threshold that is constantly in flux. What is state of the art today will be laughably archaic in 5 - 10 years (especially so for technology companies). The harmful effect is that every company will adopt this policy in order to compete and hope that the other companies will adopt the "bozos." What then will happen to the average programmer who is learning the ropes and doing their best to become a DE some day? Should they get filtered out?
There are some things about the event horizon that make sense ("one of us is not as stupid as all of us"). However one must be careful when distinguishing their fellows. While it may encourage the best of the best to join together it can also breed an elitist attitude that is counter-productive to innovation.
Interesting article and a good read! It's something that I toy with in my mind now and again. Personally I think DE's should form their own groups outside of the organizations they work at. Let people lead by reputation rather than hierarchy.