Should we compete for tenure positions at top universities or be happy at second tier universities? I am PostDoc at one of leading Universities. It was not that hard to get there for a PostDoc, yet it seems  really hard to stay for permanent position, I see the competition is big.

I also see that the working conditions are not competitive (both in terms of salaries, costs of living and rent in a small university town, and motivation bonuses on top of your salary).

On the other hand, having renowned Uni in my CV, working as a PostDoc for ERC grant (I am not PI), I have mailbox full of tenure offers at ... say, second tier universities (ca. 100-300 positions at Uni rankings). 
They offer me freedom, fixed position, competitive salary, lower costs of living. 

On top of that, top Universities do not really care if you win regular grant, or top competitive (e.g. ERC), your salary is the same. While bringing back ERC or comparable grant to second tier University - you are the man. They praise you, you are respected and you have high chances to getting bonus that may even double your base salary (forget about it in top tier Universities).

So in my case, where my field just needs bunch of laptops and computation cloud and not costly lab. Is there really a point in competing for tenure at top tier University? Anyhow I already have a name to be accepted for renowned conferences and  Q1 journals from the field. 

Honestly, I do not see the point, I already collected Hoodies with some nice Uni logos on this, I do not really care about brands anymore.

So what are actual and maybe overlooked by me pros and cons of choosing on one hand: a permanent position at lower ranked university, and on other keep on pursuing highly competitive and uncertain positions at high ranked university.
As I am sure you expected, this is a highly personal decision that nobody can make for you. Since you seem to be based in Europe (you are talking about ERC), I will frame my answer in the context of applying in Europe:


Your point that "you are the man" at a lower-ranked university when you bring in a high-reputation grant may be accurate, but you also need to ask yourself the question why people don't routinely bring in such grants in these institutions. Do they not support applying for grants in the same way? Do you not get enough time to develop an excellent research program? Do you not have access to sufficiently qualified students? Are the grant agencies biased in their evaluation? As a rule of thumb, it's typically harder to develop an internationally excellent research program at a lower-ranked university than at a top one, for a combination of different reasons.
Especially, ensure that the lower-ranked university that you are looking at actually values the same things you do. Many lower-tier universities "officially" want to compete for top grants and improve their research profile, but not at the expense of what they already do. In practice, this may mean that you have to compete for top-level grants while doing more teaching or service for your institution.
The "label" of working at a top university can help you in various ways, including easier access to valuable companies and excellent students.
There are challenges with being a "big fish in a small pond" - the small fish around you may not be thrilled, there may be little to no chances to collaborate or get inspired, and it's much easier to have large impact if you are not just one faculty standing alone.


With all that said, there are certainly advantages to being at a lower-tier university:


It can be easier to have a reasonable work-life balance at a lower-tier university. However, again, do be mindful of teaching and service responsibility - I have certainly seen people at smaller teaching universities that are considerably more busy than I am, because they have to teach an awful lot more than me.
As you say, it's easier to get a job at a lower-tier university, and a faculty job now may be better than getting, maybe, a faculty job at a top university in 3 years (or not).
Salary-wise, there will initially be little difference between excellent and lesser universities. I doubt that top universities pay less than weaker ones. However, you are right that if you actually end up as the big fish in your small pond, you have a good basis for negotiation - but that feels like something that you should not rely on in your career planning.