I guess I might feel differently if I'd love in one city for 35 years too. But that's going to be not too many PhD holders, who are most likely to have already moved once for grad school even if undergrad was close to hone.
Hmm, our experiences vary quite a lot. My experience has been that a fair number of people pick graduate and undergraduate schools based on proximity to home and then go on the market so selectively that they have almost no shot of obtaining a TT position. I've seen it offline (we have multiple people who live at least 2 hours away with all their degrees from institutions in that city) and seen I-don't-know-how-many threads here. Perhaps you're not reading the same adjunct plight threads that I am where one of the primary arguments is people feel stuck because they have good emotional lives so they don't want to move far, but can't find a full-time teaching job where they are and no comparable professional-level job exists that would use their graduate degrees.
One of the reasons that compass state institutions have graduate programs in some areas is people don't want to move too far from home. One of the reasons these fora repeatedly have to point out how useless a fully online graduate degree from a for-profit is on the academic job market is people don't want to go that far from home.
While it's true that people do sometimes move an hour or three away for higher education, people who have very close ties to an area often balk at moving more than three hours away or make interesting choices like driving four hours (each way) nearly every weekend. We have multiple people on our campus doing that as well.