>They want to work for [Google|FB|Apple|...] and to do that they need to live in the Bay Area.

This doesn't check out. All of those companies have large offices elsewhere. I agree with your take that you work in NYC because you want to live in NYC so that's where you work but your bias is showing that you can't consider that people feel similarly about the Bay Area.

As one data point, I chose San Francisco when I had the guaranteed option to work for the same exact company with proportional pay (stupid high relatively speaking) in my hometown. People with options move where their quality of life is maximized -- that's the beauty of having options.