I actually seriously dig downtown San Jose, would live there. It's right next to SJSU (which yeah, is mostly commuter school, but still gives an energy.)
It does have a real downtown, bigger than any other BA city's downtown (except SF), and it's super diverse, which is important to me. (Diverse not just in ethnic makeup, but in terms of what everybody does for a living. SJ is not all computer people as much as other towns up north.)
I like going to DIY/indie-ish music things... I would probably go to SF for that, but SJ has more of a scene than most places in-between. It also has the sort of neighborhoods/housing (not all condos, not all new basement-less ranches) that is conducive people creating when they don't have much money. (I've also just described Portland, hmm...)
Still, the article is fair enough: most young geeks who aren't art nerds would probably rather live in Palo Alto than SJ. But for other types, SJ is better than anywhere in-between except for SF. And depending on other things, it's even better than SF.
I also like how bike friendly SJ is, but PA isn't bad for that.