Most Silicon Valley startups don't need top talent. They're marketing experiments with a small bit of technology and a lot of painful support work (due to massive, accumulating technical debt) that can only be done out of VC-istan dues-paying as young people take on pager duty for the job they think will get them investor connections in 6 months so they can do their own gigs (ha!)
They need some flashy talent (young, clueless Ivy/Stanford grads) so they can tell investors that they bought a bunch of Ivy stock on the cheap. They don't need top talent.
On the other hand, hungry talent (in a world where most people will never buy a house) and prestige-seeking talent and clueless/young talent are useful to them, especially if it congeals in one metropolitan area (such as Silicon Valley).
The Valley's more than good enough for most of these firms. They complain about the "talent shortage". There isn't one. They're just complaining about paying more for talent than they think it should cost, and "what they think it should cost" is Dickensian.
Of course, there are companies out there (if few) that demand extremely high levels of talent, but at that rarefied level, you're either (a) going to be small enough that you can do it within one location, or (b) going to ignore location outright, as OP suggests.