> To play devil's advocate: someone who is in NC (or a lower cost-of-living area), if they're paid the same as someone in the Bay Area, is effectively being paid more for doing the same work.

They're paid the same in fact, they just spend it poorly (on expensive Bay Area real estate, mostly, but also other services the area makes more expensive.) Why should Google help subsidize SF Bay Area real estate? Historically, the answer is just, "because so many employees are here and we like them here", but will that cut it going forward?