In 1984 I was Intel and the 'problem' was that there wasn't any real use for personal computers. A 1024 x 768 color CRT monitor was huge and cost about $3,000. Running at 640 x 480 in monochrome with a 'Hercules' graphics card didn't come close to the experience you could get with a decent minicomputer 'workstation.' But a workstation cost $50,000 and up.
In 1994 I was at Sun Microsystem (the Liveoak project, aka Java) and I would have told you that the 'problem' was that you couldn't do business over email and without an economic engine what would fund all the work. I told Eric Schmidt (who owned Sun Labs at the time) that so called 'e-commerce' was where all the money would be in 1995 and if Sun wasn't able to participate it was toast. (sounds pretty lame in retrospect, but they did sell a lot of servers to Amazon :-)
In 2004 I was at NetApp (after having my startup acquired by a company which would later be folded into Motorola in a deal which was reminescent of one of those trades in baseball where you get cash and a draft pick and oh by the way this guy over here.) I would have told you that the problem was that technologists had been pushed aside by MBA types who had lasered in on the 'rent seeking' business model and killed off innovation along the way.
There isn't a 'problem' with Silicon Valley, it simply exists like a beaker sitting over a bunsen burner. Over time different chemicals are available in the beaker and sometimes something magical happens, and sometime noxious fumes come out, but the place is an engine. A lot of startups are endo-thermic with respect to cash but a few are wildly exo-thermic. Often times the by products of those become the ingredients of the next round of innovation.
I'm not sure the author has had time to appreciate that while she may have encountered dozens of GroupOn clones, she seems to have missed that there are dozens of GroupOn clones. If you were in, say Minneapolis, how many GroupOn clone startups are there? Energy makes reactions possible, the SF Bay area is full of energy (and resources) which makes it easy to create a new company. That the companies that have currently been created are boring to you is merely a side effect.