Having a highly skilled and productive co-founder is a huge asset. Nobody is perfect and living 3000 miles away doesn't seem like a deal-breaker (not even close).

Effort (and appearances) are not the same thing as results. It's possible you are mixing these up to some degree. Consider: face-time, "earning" vacation and lack of clear policies/directions are all prized in big corporations.

Oh, and I second (or third) the idea that you just move to San Diego. Seriously.