Deerhoof, Bassnectar, Girls, and Nodzzz are a few just off the top of my head. A lot of great stuff happening in Oakland, as well. The Anticon collective, etc.
There are lots of bars and venues, but I recommend checking out Bottom of the Hill in Potrero -- their shows tend to be cheap and they feature local talent a lot.
I get your point: SF isn't the top dog when it comes to music, but honestly... you can find local music no matter where you are, as long as you look for it. And if you don't look for it, all the local bands you're not going to see are just going to move to Brooklyn (or wherever else is cool that year) along with everyone else.