I absolutely agree with your statement that there are lots of very nice places to live other than San Diego. I have lived in several — Minneapolis, Chicago, Austin — myself.
I just disagreed with your implication that only hardheaded numbskulls are sticking around in San Diego.
Many folks of relatively modest means make due in San Diego, such as military families. Yes, lots and homes are smaller than in Upstate.
But, I have observed that lots and homes are smaller than Upstate in Tokyo, Manhattan, Rome, Paris, and Monaco, too. Obviously, there must be charms that outweigh the ‘cost’ of the smaller-lots-and-smaller-homes element.