"why the nerds get paid so damn much"
Simple, when rent is $2500+ a month and house prices are $600000 and up, you will have a hard time getting by with less than $60000 a year. Not forgetting the other higher costs of living.
IT workers here don't get paid that much more, considering. The idea that IT wages is sky high in silicon Valley is flawed and misguided. You'd be lucky to be offered more than $70000 a year as a mid level IT person/programmer, with, say, 2 years experience, let alone fresh out of college (good luck getting a job that's more than a crappy underpaid intern position, experience is everything).
And lots of companies like to hire foreign workers who they can pay considerably less, because they depend on their employer (H1B1 visa abuse).
Start ups frequently dare to advertise vacancies where the pay is a minimal stipend, with the lure of stock options and a questionable future fortune to be acquired (95%+ of startups fail...). And even if you happen to earn a decent wages you have (or are expected) to work more than 40 hours a week, which renders that wages on an hourly basis quite low.
The only IT workers making a fortune are those who happened to be lucky (not merit really) enough to own stock options in companies that subsequently grew a lot, or were bought by larger companies. For the other 99% of IT workers here it's the same old grind as anywhere else.
At least it's sunny with stunning nature at your doorstep (if you like sun, it starts to get to me...).