I'm not true that is necessarily true. Most software jobs were in large metros. But, in the Boston area for example, I suspect most software jobs are still outside the city. (They were essentially 100% outside the city 20 years ago.) The same is almost certainly true of the Bay Area; most of the software jobs are not in SF proper.
That being said, this doesn’t change my argument much for two reasons. First, “you have to live within commuting distance of downtown” isn’t that much different from “you have to live within commuting distance of this suburb”. The nearby suburbs of some of these metro areas are still pretty darned expensive and congested compared to the rest of America. Second, the zone of reasonable commutes is much smaller still if you have a spouse who works in another area, or if you’re liable to change jobs in the next few years. And of course the housing centers with reasonable commutes to all possible job centers tend to be expensive.
In my case, I had a small apartment within walking distance of $WORK. The office at $WORK was ... ok. Not as bland as the finance office I used to work at in Chicago, but a bit cramped and poorly provisioned on things like coffee. On the immediate benefits front, working from the office would be an obvious choice for me, even if it’s not the best office I’ve ever worked from. But we decided that we loved WFH so much that we left the city and bought a good sized house in a less populated area. We each now have our own office that we can customize to our hearts desire. Oh, and our COL dropped, a lot.
The other bit that you didn’t mention, and that is intimately connect to my story is the factor of cities. As of last year (who knows how this will change) most software jobs were in large cities. If you happen to enjoy living in cities, this is really good news for you, but for everyone else this creates a tough series of trade offs between preferred living arrangements and career needs. In retrospect it’s fairly clear that we lived in Cities purely for the career advancement reasons; we didn’t enjoy the noise nor did we take advantage of the culture opportunities (food, drink, etc.) that cities offered. All we got in exchange was higher wages, smaller and more expensive housing, and longer commutes to the activities we preferred to do. This new arrangement suits us much better in retrospect, even if we didn’t come to that conclusion in say 2019.