Most of the engineers making most of the tools being praised in this thread are in Germany, so I don't think that generalization quite holds.
Even if the best SWEs are better in the Bay area, there's also a lot more competition for them, so Google in Germany might be able to get top 1% there (and in neighboring countries) but Google in the Bay Area is probably having a tough time getting even top 10%.
That's a good point, and why I'm happy to see remote offices pop up in many locations. The problem is the top .1% which can live anywhere, is often a poor representation of the depth of talent density.
Even if the best SWEs are better in the Bay area, there's also a lot more competition for them, so Google in Germany might be able to get top 1% there (and in neighboring countries) but Google in the Bay Area is probably having a tough time getting even top 10%.