You're absolutely right. However a lot of the engineering is concentrated in a few major centers so there's a good chance he's near a major city like LA/SF/NYC/Seattle/etc

Even if the office is in a low cost of living city, the effect is similar with Google paying at the high end of the cost-adjusted band.

The point was more to illustrate that it's not just any average job and they can do things that work for them that don't work for a lot of other businesses.