Perhaps I was just rambing (go figure

)
Often, people in their secondaries and personal statements will make reference to their desire to stay in California and be near their family as a way to demonstrate their committment to staying in CA. That's not to say that you would be required to stay in SD if your family is there, but if you say something in an interview, iin your statements or if your letter writers or anyone expresses that you would want to stay near your family and you are applying to a school far away (like UCD or UCSF), there is a chance that they would make the assumption that you would be less likely to attend a school farther away.
Part of the crapshoot about this admissions process is this: Schools have a limited number of positions that they can offer in any given year. They have to hedge their bets on who is likely to come to a school versus who is just applying because its in CA. With more ties to an area, the likelihood increases that you would want to stay in that area. I agree that it is presumptious on the part of the school to make those types of assesments, but THAT really does happen. And that is what I am saying is more likely to occur than the theories that are being espoused just now.