[ghaff]

Proximity to a major city still has advantages like access to cultural events, good healthcare, etc. even if you don't need to go into the city for work. And, indeed, historically tech companies were in the suburbs rather than the city itself. Boston basically didn't have any major tech employers within the city limits for a period even though there were many in the suburbs. So even people who may not want to actually live in a major city might still want to be within an hour or two of one.

I'd argue it sort of has played out. A handful of companies are willing to pay almost anything for the people they want, especially if they're located in SV. Pretty much everyone else has shrugged their shoulders and moved on. And it works because 1.) Hiring is a very inexact process and 2.) Not everyone want to work for one of the big tech companies for various reasons.