LIC is increasingly well-developed but mostly as a residential area. It's not Manhattan and doesn't really have top-tier employers. The tech scene in NYC is almost entirely concentrated in Manhattan, with the exception of maybe a tiny tech scene in parts of Brooklyn, which Queens (which Long Island City is part of) is not generally hip enough to have. This adds a top-tier employer with lots of high-paying jobs in a new location without displacing any of the existing tenants occupying prime office space in Manhattan. It also doesn't worsen the rent situation substantially where it's the worst. Rent is high everywhere but Queens has more supply, way more potential supply and is overall better positioned to deal with the additional demand than Manhattan or Brooklyn. Also, this isn't obvious to people who aren't familiar with NY but while LIC is easy to get to from most parts of NYC, it's just far enough that you probably wouldn't want to live in New Jersey, while that isn't as true of many parts of Manhattan. This definitely makes the location more attractive from the perspective of New York State, who doesn't capture the state tax from those that commute from New Jersey.
Also, you can't usually hire that many people by poaching people from other companies and they need a balance of junior and senior hires so lots of them will have to come from outside, at least on a net basis. This will include highly-compensated senior transfers from their other offices (to maintain the corporate culture, etc), will include new graduates (many of them would have gone elsewhere) and new immigrants who would've gone anywhere for the job. This also creates additional economic demand which will boost overall spending, creates an upward pressure on tech salaries which will add to the tax base. Also because Amazon does churn through people, this has the potential to bring many more people than 25K that come to NYC for Amazon and stay around to do other things. Ex-Amazonians as a group are also probably a good group to have around for any tech scene.
There's been a need for an alternative to Silicon Valley and this actually moves the needle in a significant way to positioning NYC that way. Combined with Google's plan for expansion, recent arrival of several SV tech companies and the natural advantage of being already the world's capital of finance, media, fashion, etc, at a time when tech is increasingly central not to its own industry but to every industry, this squarely puts NYC in contention.