I wouldn't call it a bad argument, as it's rooted in rational economics - which is also why it's unfair to call it "bad faith."
The ecosystem of tech is partly built upon the idea of decentralization - as long as you can connect to the internet, you should be able to do what you need to do from anywhere. Otherwise tools like "video conferencing software" would tank quickly, as we might as well just fly to visit everyone we need to meet, right?
If you as an employee want to price in the substitutability of your job search as the demand side of the market, fine - as a homeowner, I would recognize that inelasticity and price my rent accordingly. There is no "bad faith" there - just rational economics, where one market understands that the other refuses to correct itself.
A "Google Salary" doesn't mean anything if you take home a small fraction of it, and what's left is eaten up by higher prices of the same goods; anywhere else, you can take home more, and those remaining $dollars can get you more. It's at the point now where I recommend to my employees / friends / colleagues that they shouldn't move to the valley unless they're getting 2.5x their salary, as that _might_ get you the same standard of living vs. our current spot.
Now I don't live in the Valley, but I somewhat empathize with the homeowners argument to _some_ extent: It's not necessarily classist or anti-environment for homeowners in a community, who _own_ the land, to band together and dictate what should go on in that community: how it should look, what would be the best for their investment, etc. And the point that talks past them is "this pushes people out to metros." The easy response is: it only pushes those out to metros _who feel like they have to live there._ Otherwise you price that into your decision to move there along with all the other factors at play.