So in a way, it’s good for the valley if more of the economy becomes more corporate.
So, with loss of small business, we lose access to certain unique perspectives of how those kinds of businesses should be run. We lose the character that those businesses add to our cities and towns. Furthermore, there is an economic cost to the loss of those businesses for our cities and towns.
If it’s better for tech, it doesn’t mean that it’s better for humanity.
People often romanticize the "mom & pop" places, but there's a reason that most consumer-facing companies are very large, and those reasons were enumerated by the OP.
Also, there's a good deal of selection bias going on. If you had a successful business, why wouldn't you look to expand it to multiple locations? Running a single store makes your business vulnerable and usually requires a lot of time.
Some people are content with what they have, or find running one location stressful enough, or whatever reason.
There are also weaknesses in the face of some threat because there is no diversity to survive it.
Biology is not designed or run by any intelligent agent that we know of. When people apply the diversity argument to non-biological systems, it makes me think they are actually and really arguing for intelligent design of biology.
My argument still holds, if you over centralize or lack diversity (not in the social science race or sex based sense) then you’ll run into issues. Examples include Russian central governance, as opposed to more independent localized governance and sustainability. Another is non diverse economic production, for example many middle eastern countries.