Zoom out - you're missing the huge demographic risk. The next generation of people who will become top engineers, founders, etc. are facing tougher tradeoffs between standard of living and access to SV's social and business networks. It's not only the risk that the current drivers will leave but that the new drivers will just go elsewhere.
For 2015/16, new college grads at good companies total comp is in the range $120-180K, and they definitely have access to good social networks within the company and outside. Is there a large group of next generation people I am missing?
Considering how few 2015/2016 college grads will actually get one of those jobs at good companies, I think your large group is, well, any graduating class. If the Bay Area becomes unattractive for the kids who can't score $120k+, or for seniors like me who can't score the $200k+ jobs, it won't survive at the level it has been going on for.
In that sense, the distribution of salaries attached to the answers is telling. How do the startups and non-elite companies survive if nobody they can actually afford wants to come or stay? The area can't just be a playground for the elite megacompanies that can pay the salaries you state.
Actually, maybe it can? If we can ignore the somewhat tasteless aspect of this, what if the Bay Area was just a playground for kids who get 6-figure salaries at graduation, and then stay at high-paying jobs there?
It becomes extremely elitist, with all the costs and benefits of that. The benefit is that everyone who can afford to live there is implicitly vetted by a rich employer or investor, so there could be extremely high serendipity. The costs are massive insularity, risk of the next big thing coming from elsewhere, and hugely inflated costs for basic service labor.
But, if the vetting is good enough, maybe those costs are worth it?
