Also, Boston is a niche: it is home to some bright tech people. YC is close to them, while the valley is away, so YC is the obvious choice for Boston students. That gives YC a competitive advantage at least in the area and makes it distinct. Moving to the valley would make YC more generic and less of a brand.
Willingness to move to the YC location is a precondition of being accepted into YC. I have to move from Mountain View CA to Cambridge MA for SFP... even though WFPs are held here, where I already live. But I'm not complaining at all; living in Boston for a while sounds great.
Which raises an interesting question as to how the YC partners handle the EC/WC split between the SFP and WFP. Do different partners play bigger roles in different programs? Does PG rack up the airmiles/spend 3mo of the year away from home?
Is cloning involved?
If Graham really feels that way about the East Coast investors (and especially if he says so publically), he might as well make California the permanent YC home.