I've been living in the Bay Area since the dotcom days and they've been asking the same question since I've been around. Until people in tech stop making money, I doubt SV will collapse, but it will go through boom and bust cycles. But the booms tend to be huge and the busts tend to be not as bad.
I had the opportunity to get a job in Seattle at Amazon about 10 years ago. I would have taken a paycut, but with the 0% state income tax and with the generous signing bonus it would have more than made up the difference. (I'm pretty sure property taxes are higher though.)
But then I had to contemplate exchanging 300 days of sunshine for 200 days of rain. At the time, I was playing rollerhockey outdoors at 8pm and came to the conclusion that I just couldn't do it because of the weather. And I grew up in Vancouver, BC so the rain didn't bother me as much, but I just got too spoiled by the amazing Bay Area weather. If you're not used to it, the rain in the Pacific Northwest truly is relentless, so it takes getting used to.
Mind you that was during the time when rent prices were high but not as ludicrous like they are now. Even during the dotcom boom there were similar stories of people living in their vans, so it's not really a new story.
But my friend was charged 5100/month for a 2 bedroom at mission bay, which doesn't make sense. If I had to make the same choice now, it would be a lot harder to make and Seattle is definitely compelling if you can get past the 200 days of rain.