Your first point is raised in some form nearly every time this comes up. But what is forgotten is the value of living in these more expensive places. $75k in NYC/SF may buy you less, but you get more free things of value, in the form of quality peers, access to eduction/investment, etc.
It's only an anecdote, but: My income would be the same regardless of where I live, and I'm pretty sure my choice to live in NYC provides me more happiness than most other possible choices.