It might be that some companies offer near-SF salaries to make it a slam dunk for the new hire. From the point of view of a Valley giant, they probably churn higher-salaried people in SF/SV all the time, so one more located elsewhere is not a biggie. At 10% less it's still a win, and because of the differential from local prices, the new hire will be super excited to join and stick around, so why not? The more you push down towards average local salaries, the more you have to compete with local businesses and the more you risk getting average performance out of the hire, all for a relatively small cash saving.