Depends on just what drives the desirability, I think.
Google is covering their bases in terms of both "suburban areas" (Mountain View) and "dense cities." So they can attract people who prefer either style of living.
If there's a significant subset that prefers "cheap" directly, then they're missing out on that group. Otherwise, it might be more cost effective to simply keep offering higher wages in the high-cost areas, if cost and desirability are roughly correlated for most people.
Where I see it breaking down personally is that the expensive areas aren't that bad for 20-something folks who want to rent anyway. Say you throw an extra ten to twenty grand a year at rent, that can be easily covered by a compensation premium. But once you start looking at moving from renter to buyer, down payment requirements make expensive areas a lot rougher. This might be fine at Google-level compensation, but there's a lot of other companies who could have a harder and harder time retaining people as they age.
They haven't covered rural. I don't think they are even close.
I know people in multiple states who like to shoot rifles (AR-15 style) and shotguns in their yards. One hunts pigs in his backyard. A different one can hunt turkey.
I can't really imagine that in Mountain View or San Francisco or Manhattan.
