Imagine you're a lumberjack. Now imagine that everywhere you go, every day, all you hear about is trees, chain saws and axes. Most of your friend's social lives seem to revolve completely around lumberjacking. And there are no girls.
I can completely understand a founder's choice to live there. As an employee, it's not my cup of tea.
I have as many non-tech friends as engineers -- only a small percentage of the population work in this field here. There are also plenty of girls, many of whom are attractive, both within and outside the field. I mean, that latter point you can just verify by going on something like okcupid.
I would lump your response into pessimistic, based on insufficient information. Fundamentally it's one of the few I listed. The only other reason I can think of, which I may not have mentioned, is perhaps someone values very strongly living where their family is, and they are willing to suffer the opportunity cost of doing so.
Yes, there are girls. I dated a few. But the ratio is pretty bad and most of them are tired of ubiquitous tech guys. I sometimes felt embarrassed to even mention that I work in tech. Maybe that's my problem.
Accordingly, competition and selectivity will naturally go up -- you'll have to be creative!