Nice is relative. People who make a lot of money want things relative to their interests. Areas become more expensive due to poor planning from civil servants more than Google salaries. NYC, DC, Boston, Atlanta, Austin, London, Brussels and Berlin are all cities which are also working on "solving hard problems" but they don't have nearly the cost of living problems that SF has.
Also, people who make a lot of money, especially in a given field (like tech) tend to want to live with each other, which really exacerbates the problem in markets that resist change (like SF).
Of course, allowing huge office towers to go up but refusing residential development doesn't help.
