Peninsula/South Bay isn't a cultural desert -- there are amazing ethnic restaurants, used book stores, concert venues, etc... -- but they generally aren't all within walking distance, nor is it likely that a great selection of such places will be equidistant from both you and your friends. On the other hand, if (like me!) you prefer to read/code/etc... most evenings and are more deliberate in regards to outings, it isn't really a problem.
Cities also allow you to save money by foregoing having a car, but it's less true for SF: public transport in Bay Area -- even SF proper -- is quite horrid compared to NYC, Berlin, etc...
Not everyone lives in SF by choice: while SOMA is easily accessible from Peninsula by multiple modes of travel, other areas (FiDi, mid-market) are fairly far from Caltrain, expensive as far as parking goes. BART is great when it's not having a strike, but the only locations in Peninsula with BART stops are Millbrae, Dalty City, and Colma.
What most people raving about "end of suburbia" are missing is that high density (SF, NYC) living is rather expensive and this isn't likely to change (SF is a Peninsula, Manhattan is an Island).
What's also missing is that cities vs. suburbia is a false dilemma: many neighbourhoods in Portland and Seattle, parts of Peninsula (e.g., Burlingame/San Mateo area), East Bay (e.g., Berkeley), and even Downtown Mountain View/Palo Alto are far cry from the usual suburban cliches (there is abudance of independently owned restaurants and stores, relative dearth of strip malls, rail transportation, etc...) while still having lots of green areas, being amenable to driving, good school systems all available to middle class (St. Francis Wood in SF might have all of this features, but the middle class is priced out of it.)