I think it's more complicated because jazz is, or
has become, a "fine art" whose basic vocabulary requires years of formal training to learn, much less master. Boston happens to be the home of several of the finest jazz education programs in the world. This means it attracts countless promising musicians for at least the span of a few years. Beyond that, of course, is another question. So it seems problem in this case is just another instance of Boston's larger problem of retaining students after graduation. Look at this very telling
article, in which a San Francisco newspaper writer on the NYC arts beat illustrates Boston's role in sustaining NYC's jazz scene. The snide but honest conclusion of the article: "Whether the institution is in the heart of Manhattan or all the way up in Massachusetts, all roads lead to our fair city."
Also, since you mentioned San Francisco, I thought I'd mention a few interesting developments in that city. (1) Sometime last year or the year before, the legendary Jazz at Pearl's club in North Beach closed its doors. Pearl's was located right along one of the City's busiest streets (for nightlife and tourism), and provided just the kind of atmosphere people in this thread want to replicate. Yet it wasn't able to survive. (2) Yoshi's Jazz club in Oakland - a world class institution in a second-best location (like the Regattabar) - tried to replicate its success with a second club in San Francisco. Within a year or two, they were forced to radically expand their show offerings because jazz wasn't selling tickets. The Oakland club still seems to be doing fine. (3) Thanks to private philanthropy, SF is getting this thing, the SFJazz Center:
Similar to NYC's Jazz at Lincoln Center, it will be a space/concert hall dedicated purely to jazz and new home of the organizers of SF's jazz festival. While not affiliated with any college or university, it's still another example of the increased importance of institutional support in helping jazz thrive.