Ignoring a lot of the problems of this article, I think even an island an hour or so away from the Bay Area wouldn't really take off with tech companies. Otherwise why don't you see more tech company offices in lower cost areas like Stockton, northern Marin, etc. that are close to the Bay Area?

Of course the biggest difference in his example is immigration. But in that case you'd have to explain why Vancouver, a few hours flying from the Bay Area, isn't awash in high paying tech jobs.

Close physical proximity seems to be very important.