Well hopefully my comment didn't imply that living in Palo Alto meant you were destined to go to Stanford...but there IS a real connection...many residents went to Stanford, and for better or for worse, many have already made the outrageous guaranteed-admission donation, which , as you say, is in the millions.
Tech money is literally raining down on Stanford. The only thing left to upgrade on the campus is to line the gutters with platinum. Its sad given that San Jose State actually educates more local workers...but connections to Stanford are a real social network for some of these people.