Speaking as one who lives in southeast Santa Clara, walking distance from the San Jose border, and also as one who was born, raised, and lived in the Sacramento area for about 37 years...
San Jose is the third largest city west of the continental divide, after only LA and (barely) San Diego, with over a million inhabitants, and another couple of million within 15 miles or so. Yes, there is a bad part of town, as with any city that size. Sacramento has some of those too, doesn't it? Sacramento's crime rate is higher, BTW:
http://www.bestplaces.net/crime/?city1=50668000&city2=50664000
But, despite some blemishes, SJ is The Big City of Silicon Valley, most of which is quite nice, and (despite the currently messed up economy) is still relatively flush with money. My commute takes me by many headquarters of companies with market caps in the tens or hundreds of billions of dollars. I work near a bunch of people from Google, for example. Market cap: $163B. I recently did some work at the HQ of Apple, market cap: $171B. Even in bad times, these are companies that could throw some serious money at expensive seats, etc. Real estate is expensive, and the cost of living is higher, but this goes with higher wages: I've made better money around here than I ever have anywhere else. Bad mortgages and big credit card balances have taken their toll here, just like everywhere, but there are still quite a few people who wouldn't mind an expensive night out at HP Pavilion. The median household income here is $82K, in Sacramento it's $43K. And income is still higher in some of the surrounding communities.
Fans here are good. I've never seen a completely snow-free town so smitten with hockey. Any night there's a Sharks game, it's on every TV in every bar in town. Sharks shirts, bumper stickers, flags, are all over the place. (Warriors: not so much, they aren't really perceived as being local, in evening traffic it takes 1.5-2 hours to get to Oaktown from here.) And they could move to SJ without completely stabbing Northern California in the back. I know that won't matter to everybody, but it matters to me. IF they were going to move, I'd rather have them move to SJ than to Orange County (ugh), Vegas (ugh), or somewhere even farther away.
So, if I were a Maloof, and feeling forced to move the team, that would be why I'd consider SJ. Short move, more people, more money, "small market" problems greatly alleviated.