While this is true, you are missing the point of the valley. It's a place where like minded people accumulate. People who think they can change the world by creating the next big think. All these people could all be delusional and totally wrong for all we know, but the point is they all think that way.
It's like a party. Can you just jack up the radio and dance away in the solitude of your room? Sure, you can. But it's better to go to a real discotheque and dance away with others. The chances you meet someone interesting are higher, the chances that your amazing disco steps get noticed are higher etc etc.
Continuing the stupid analogy, in the valley there are these page 3 reporters (techcrunch, cough) reporting all sorts of things. These things make you famous and get you $$. See, how things are different when you are hacking away in your room in cape town? Want more developers? There are tons of people who will code for you. "Passionately". It's all in one place!
Do not underestimate the "energy" of the valley. Having like minded people in one place makes all the difference (just like anything else).