Having a founder fly out every week is still cheaper than building a startup in the Bay Area as soon as you leave the 3 people in one room stage.

The reason why it happens is the same reason why VC have historicly had negative returns; VC's as an industry make most of their money by convincing investors to part with there money not from actual returns. As such they like having a dog and pony show in the area while they try and fleece more people.

This sets up boom and bust cycles and many market distortions. As VC's still want positive returns it's just not their #1 goal.