It seems riskier to employees if that were the case - if you get laid off or tired of one company in one of these small regional centers and there's only say 5 companies total to choose from, chances are you'll have to uproot your life and move to a new city for your next job which is a big inconvenience.

I think some part of the network effect of big tech hubs is the option value. If you're in the Bay Area you can have the best of both worlds - stay in one place as long as you want for your personal life/family, and still have the possibility of working at any of thousands of the best companies of all sizes and switching between them if you need to.