You make excellent points, and I don't mean to minimize the regional issues.
Sure, if I had a magic wand then I'd increase housing being built across the Bay Area. In fact, I'd like consolidate the jurisdictions in the Bay Area, but that's a whole other argument.
I don't quite know how to play out the claim that demand is infinite. One, I don't believe that. And, two, it seems like an argument that has us throw up our hands and do nothing. It's large problem that needs a large solution -- I've heard estimates in the 100-200 thousand unit range -- but I'd rather shoot for that goal than do nothing at all.