Also the majority of the people won't move. Even moving an office from the South Bay to the City will cause a lot of people to quit.
Source -- I work for a company that moved it's office from the South Bay to the City and a lot of people quit.
So, in practice, you're asking "Why doesn't Google just pack up and move to Nevada or Kansas City?" Such a move would probably be highly disruptive to business (probably at least two months of lost productivity (even if you pay relocation consultants to handle everything) for all employees being moved, and you're talking about moving substantially all employees).