This is not the only other option. Imagine telling an engineer, hey I'll pay you $500k a year in Atlanta, Miami, Philadelphia, Chicago, or Boston? Rent is immediately cut in half and some states have no income taxes. Their disposable income essentially triples.
I think you mistyped here. The point of the move is that $500k in San Francisco vs $500k in any other city in the US (except New York) result in substantially different qualities of life. $500k a year income in Miami can get you a mortgage on a 3 bedroom house and a boat.
In SF, you get a mortgage on a 1 bedroom apartment.
500K in SF gets you a smaller place and plenty of discretionary income. Companies in other places can often give you a house, but not match the discretionary income.
Pay your engineers 500k in a medium cost of living city and you will have the best employee retention of any company once they get used to their quality of life.
LOCATION LOCATION LOCATION!
Stripe is not hiring "mid-level" employees. Or at the very least that is not the type of people they are compensating to run critical roles.
Good luck telling a Senior Staff Engineer who makes $500k (plus probably a couple of million in RSUs) that they have to move to Albuquerque, NM.
The other reality is that people take jobs knowing that there are other jobs available if they themselves decide to "fuck right off".
TL;DR - Network effects exists in the physical world. Too many talented people live in the bay area for "quality of life".