8% less than a Bay Area market-rate salary to be able to work from wherever I want? Sounds great. There are co-working spaces all over the place now. Get a floating desk at one of them and you can still get that office atmosphere when you need it.
However, the impression I get from the article is that people are willing to take the pay cut of the prevailing wage they'd expect to be paid for the same job in the area they currently live. I live in a suburb of Detroit. I'm employed full time for a US/UK/Australian company working for a team in the UK and am paid at around the market rate for the area I live in. I accepted this job with a pay increase from my previous employer who also paid me at around the market rate for where I live despite my working from home for several years. At no point did my previous employer ask me to take a pay cut when I started working from home, nor did they reduce the compensation increases/bonuses once I started working from home.
My work from home arrangements at my previous employer were "semi-official". The company had a defined "work from home policy" and outside of myself and one other member of my team, it was expressly forbidden. I began working from home by using the "rockstar method" -- I became a critical member of not just my team, but the organization. I was given flexibility to conduct my work in whatever manner I required as long as my obligations were met (which they always were). I left that team, though, mainly because part of the agreement was that I keep quiet about working at home. I was located in an office that no other members of my team were in, so this meant not making it obvious during conference calls because management didn't want to receive grief from other high-performing team-members who were disallowed from working at home due to upper management disliking the practice (they routinely performed work-site walk-throughs to see how many empty desks there were). This "butts in chairs upper management" style spoke a lot to how the company was managed -- in general -- and was ultimately the reason I left. I'm still cautious of this if for no other reason than habit, but mostly because it is unprofessional to have children yelling or dogs barking in the background of a teleconference where people are already expecting you're only half-paying attention, anyway.