It still surprises me that an industry that's all about connecting the world through the internet and allowing anyone to work with anyone else on anything says "yeah but you need to work in this small area of the country to do it."
The armchair economist in me says that high housing prices in the Bay Area will cause a market "correction" of sorts with other cities exploding as tech sectors -- see NY, Boston, Chicago, Austin, Las Vegas -- as those cities can get away with much better housing for cheap, even if the opportunities aren't as plentiful (yet.)
<conspiracy theory> The cynic in me likes to think that VC's and other wealthy tech execs are trying to keep housing prices high by artificially creating this in-elasticity ("you can have my funding if you live in SF" or "we don't allow remote workers"), as they all probably own houses in the area; the incentives for them would be to have housing prices keep rising, NOT fall, as they would lose significant real-estate equity. </conspiracy theory>