They only do by default. If one were significantly different, it could do better or worse than that, depending. So far none has though.
-$5K to $10K goes much further in many other countries than it does in the valley and most entrepreneurs there don't have the option of moving to the valley because of visa restrictions. Potential investors there should consider this. This is one advantage some locations have over the valley.
But the money does go 10 times as far, so the idea could have potential. $25K can roll a startup for a year or more on the cheap in Bangalore.
Also, a startup that's doing something like, say Reddit, may not need to be physically close to users to be successful.