I also find it interesting that a lot of people live in the Valley in their 20's, but when they hit late 20's/early 30's, they're gone. I'm not sure how it ties in to the above statement (or if it does at all.) The most common reason I've heard is that the Valley is a terrible place to start a family.
I would imagine that the cost of housing plays a large part in that. Housing in the Silicon Valley/Bay Area is insanely expensive. Maybe not as bad as downtown Manhattan, but still insane by the standards of pretty much every other metropolitan area in the US.
If you're by yourself, you can get away with squeezing into a tiny apartment and making do (or getting roommates). If you're starting a family, this isn't an option.
Apart from the cost of housing, let's see: sunshine 9 months a year, driving distance of Tahoe to go ski, the ocean is 40 minutes away, we can go every weekend, plenty of campgrounds and parks within an hour drive.
No, I think it's a great place to raise a family. But of course everyone is different.