No, there isn’t a detachment from reality. It’s simply that fewer people want to live in the Midwest. Considering the environmental and social problems that come with living in far flung (cheap) suburbs, it’s a wonder real estate isn’t more expensive on the coasts.
It's not a choice between live in Palo Alto or live in some far-flung Midwestern suburb. I think that sort of dichotomy gets set in place because it is pretty hard to get to cheap real estate close enough for a daily commute from most of Silicon Valley.
But throw out daily commuting (or even, really, just accept a reasonable driving commute) and many possibilities open up in many coastal cities, especially given that many jobs aren't in the cities anyway. Yes, if you want to live in the city, many of the coastal cities will be more expensive but, e.g. Chicago is not especially cheap either.
I mean, I don't think that Minneapolis, Detroit or Chicago are missing in basic quality of life facilities but enough people disagree to make them a lot less expensive than NYC or sf and, imo, that's their loss not mine
