All of the points you just made are true. They are correct.
I'm trying to make another point-- its very arrogant to assume that because this is the situation now, that this will always be the situation.
America used to be the manufacturer that supplied the world. That is no longer the case, and even 30 years ago if someone said that we would have a 100 billion dollar trade deficit with china come 2010, virtually nobody would believe you. IF a major public figure said that, then the newspapers would be full of editorials smugly decrying his foolishness.
I think its in error to assume that there is something fundamental about the US (and especially about one particular US city) that gives it superiority in the area of innovation. Yes, culture helps, but the whole of america has the american culture, not just san francisco.
And many countries in the world are starting to get capitalism-- this is no longer the exclusive domain of america.
So, I submit that the future great centers of technological boom are going to be in asia, possibly the middle east, and possible former eastern europe.
The end of the Tang dynasty in america happened about 20 years ago, and we are well into the Liao-- it takes time for the effect to be readily apparent to everyone.
But the cultural revolution has happened and we lost. America is descendant. (China may not be ascendant in anything other than manufacturing- they are still a strong regime and their government has not losened its grip yet.)
Increasingly, innovation will happen outside of the US. This is already the case with consumer electronics.
Software is only 10 or 20 years away.