It has a reputation for being the best engineering school in Canada, so lots of the best people self-select to go there. Now having said that, I think there is less variability in the quality of education you get between Canadian Universities as compared to US schools. This is mostly based wishy-washy conjecture though.
After working with so many bright colleagues from Waterloo, I knew such an article was bound to come up one day considering they are known so less here in the valley.
Coming from a collegiate programming world, their ACM ICPC record is also pretty top-notch.
