Cities reflect networks effects as strongly as anything, which is why the same cities that were important 100 years ago are, by-and-large, the same cities that are important today: there has been no doubling of exciting, the-place-to-be kind of cities in at least North America despite huge increases in population.
Because of this, our generation is stuck on the wrong side of the supply/demand bit for property. Property in uninteresting cities is very cheap, because nobody wants to be there. Property in Silicon Valley or Toronto is on fire because it's the place to be.
I think there's a critical mass kind of problem. In many ways, my quality of life in a smaller (or even very small) city could be several times higher than it currently is -- except for the people. And, for better or worse, it's the people that matter. I don't have any real desire to be the best educated, or most creative, or most entrepreneurial person in a city: I want to be surrounded by them and call them my friends.
So perhaps there's some kind of Kickstarter-like critical mass sort of system that could be put into place to kickstart small cities whereby 50 or 100 mutually interesting people committed to moving to a more remote city iff their compatriots did as well.
Of course, to make that work, there would be have to be some kind of "opportunity", which is why I'm happy to see yC-folks looking into the problem.