OK here are my two cents...
I am sorry if parts of my response sound redundant.
*****
The GMAT is one area of the application that can be changed just before/after one applies. Your work experience/ ECs cannot.
So it is only natural that one gets this aspect of his application to the best possible level. Now this level is obviously different for different people and I am sure that it would be clear when one prepares for the GMAT and takes those practice tests.
It's been widely accepted that a low 700s/ high 600s score won't keep you out but a high 700s will certainly not get you in.
I am pretty sure that AdCom starts looking at each application with an idea of getting the student in and not otherwise.
One of the first things it looks for is the GMAT score, mainly because it is easily quantifiable and each school has set internal targets for their mean GMAT scores.
So I would think all GMAT scores around the mean would be cleared on that aspect of the evaluation and the AdCom would then move on to the more time-consuming task of reading through the entire application to look for the other aspects. If GMAT raises a red-flag the candidate obviously needs to have something out of the ordinary on his profile.
All this is just to select the candidate for an interview so a 700ish score should not be a deciding factor. Most schools have their GMAT averages around 690-710.
We all know that when the final decision is being made, the AdCom reviews the application in its entirety. Only this time, they have to manage multiple averages...
Country/Profile etc. Dosa's point on the demographic playing an important part at this stage is very true.
No offence meant to any Desi's here..but many of us have very similar profiles..
The "Indian IT Male Engineer" (I am one of these) pool has already been acknowledged as one the most competitive.
As a member of the AdCom making the final decision, if I am to choose between two very similar profiles...the GMAT score will be the differentiating factor, I'll pick the guy with the 750+ over the 700ish guy. Part of this game is also because schools are constantly looking to maintain/increase their averages. If the applicant does well to distinguish himself/herself through the essays etc, his decision would be easier.
I think it is up to each person to take a look at his/her own profile and do a very realistic assessment of what could make them stand out. If you are one of those who is an IT engineer but also represented your country in the Olympics.... I doubt the GMAT score will make any difference.
At the risk of repeating many others...I would say that if you want to get into the top schools be prepared to mitigate "all" red flags and also make sure that you truly stand out in a few. What category you want to put the GMAT in, is up to you.