In this case, the 'depositors' are wealthy companies and individuals, by definition holding >$250k, who could afford to do due diligence.

Obviously they were getting perks working with 'Silicon Valley Bank' that didn't exist at say, Wells Fargo. No farmer in America was banking there because, hey, that's obviously kind of a sketchy bank.

There was a reward being given to the wealthy depositors, and none bothered to investigate the associated risk. Well, actually, Thiel did, noticed the risk, and pulled out his companies. Why should we bail out the people who missed this?