I think it's a very valid criticism if your best people (not talking about "most" people, who don't start companies and create new stuff) can easily move to another country (or other state inside the US) and earn WAY more for the same job or skill set.

It's not a valid criticism if the gov. footing 80% allows these companies to now offer SV/NY competitive salaries. Which I suspect will happen if they do it right (both the governement and the entrepreneurs).