ArXiv doesn't filter anything afaik (or maybe they have policy against really egregious stuff). If you take a peek at their mathematics section, any nutjob who think he's solved the collatz conjecture can export their microsoft word ramblings to PDF and publish it on ArXiv.

ArXiv does have value because journals overcharge authors for publishing, overcharge other researches for access to journals, hold strict opinions on what they will or will not publish or censor, among other complains. ArXiv levels the playing field a bit by being basically fancy PDF file hosting. Not every valuable piece of thought comes from a "prestigous university", and restricting access to knowledge is overall a bad thing.