I think you might see companies considering hiring people who live in Bakersfield, Sacramento, maybe even Nevada instead of San Francisco, but there's a vast difference between "usually working from home", and "Needs an international flight to get to the office" and "Literally works in a time zone that doesn't share any office hours with their boss".
If the glaring problems with SF were fixed, this is still one of the best places in the world to live quality-of-life wise. Weather, accessibility to some of the best nature in the world, great food, entertainment, etc.
Sure, not denying that, but I think it's uncharitable to question why anyone would want to live here. There are many reasons. You personally may not strike that ideal cost-value balance but it's certainly there for many people, especially if the biggest reasons why people leave SF are gone -- cost, homelessness, and possibly politics (mostly related to homelessness and cost).
