Well what I'm arguing is that the nice things SF has is contingent on there being less than a million people there. You can't share it, because if you do, then the charm of the city will be lost and it will turn into a bustling metropolis.
You've also presented a bit of a false dichotomy. I think the solution IS to develop smaller cities - that are stagnant and that have room to grow - into larger cities. You can call it "suburbanize the wilderness" but it's not exactly suburbanization because suburbs imply that people still commute to larger city centers. You can look at cities like Portland or something (I don't really know for sure if they're a good example) that develop a local tech field (or other industry), have local companies grow and multiply and they then become an economic center in their own right.