School districts are the biggest driver all around the country. If you stipulate that Palo Alto is part of a major metro area, and you can choose to work in any of the major metros in the US, you don't pick Palo Alto for the schools, do you?
I get that you don't like Palo Alto. Its not Oz. But you seem to be casting it as a dumpy suburb that has exploded for no reason.
(edit: wow, you really don't like Palo Alto!)
Stipulate that a family of four with two professional working full time is going to move somewhere in the US --- that is, they're not staying in Cleveland because they grew up there.
Then, accounting for regional salary and amenities, school quality and cost of schooling, overall burn rate, and housing costs: why would someone choose of all places Palo Alto?