The weird little snapshot you portray, of celebrity and smut, is a tiny self-contained microcosm of the greater whole that is LA.
I have a theory... it goes a little like this:
Someone is the beautiful person in their home town, or they're the funny one, or the artistic one. They have a mild level of success at home, and they feel ready to conquer the world. So they do, what thousands do every week, they board a bus, or drive, or fly to "make it" in the big city, LA.
When they get here, they find out that it's a different distribution to sample from than the one they left behind. They are not the only beautiful person here, they are not the only one with an angelic voice, the only one who can move gracefully, inspired by music. They find that the things that made them so unique and special at home, are in no short supply.
So they try to make it. They go to audition after audition. They "put in their hours". As savings finishes dwindling, they take a job somewhere, to make ends meet, and they become part of the great fabric that is Los Angeles.
You will meet them, if you come to LA. Folks that came here to make it, and just stayed... for 5, 10, 20, 50 years. They've made LA their home, and almost universally, they love it here. If they didn't, they wouldn't pay the high price of rent, or deal with the damned 405.
But not all of them stay... for some, the toll is too great. So they pack their bags, and they return home. The home they left with great fanfare, the home that they may have sworn never to return to. But they return none the less.
What story are they going to tell folks when they get back? "LA was a lovely place. It was sunny and the sky was actually quite blue. Unfortunately it's full of people more beautiful and more talented than I am, shucks."
No. They retell the tale that people returning home from LA, with hurt and bruised feelings have retold.
"LA is a soul-less, smoggy, terrible city full of superficial shallow people. It's not that I failed, the city is corrupt. If anything, my failure to succeed is due to my high moral fiber and unwillingness to play by it's rules."
It's sad, and I wish those folks well, but I believe that is a large part of why people have this skewed, warped view of LA.
Los Angeles has so much to offer, and so many ways to live. If you want a tech industry, it exists and it is growing. It is a sector which has sampled from the engineering and media roots of the greater industry. You can create stuff here. You can contribute to great causes. You can come in contact with a seemingly infinite stream of people from all over the world. You can ski in the morning, and see the sunset over the pacific that night.
I'm a husband, a father, a dog owner, and a technologist, and I love LA. Perhaps it is because I am in tune with it.