So why are we treating "This person is morally bankrupt" as the sort of argument that is unworthy of polite debate? What fundamentally makes it a worse idea than any of the above?
I think there's an incompleteness problem here, yes - but I think that problem genuinely applies to the original argument. I'm just pointing it out. (And the gist of The Abolition of Man, which I mentioned in another comment, is essentially an incompleteness argument against the idea that you can have an ethical society evaluate its own ethics without a base moral code.)
(If you take Gödel seriously, then you can't take Gödel seriously, in which case he's correct and you must take Gödel seriously, &c.)
The point, I'm assuming, is that Sam doesn't want to pack up his stuff and leave, he wants the Bay to become more open.
Open a YC branch in another city. Sam and other partners can spend more time there and find out if it really is more conducive to new ideas.
If the other location(s) really does turn out to be more conducive, ramp it up and close down the Bay Area operation.
Maybe the Bay loses out, but other places and the wider world win.