I don't necessarily think that musicians sing about California because of some state ego. I think there are two main reasons for it:
1. A lot of musicians live in California at some point in their careers because they feel that's where they need to go to be a part of "the industry." So, many of them have experience living in the state so its the easiest place to sing about. I would think songwriters also mainly live in California. And if coming to California was what helped the artist/band "make it big," then they are going to have pretty positive feelings about the state.
2. As has been true since the Gold Rush, California has a lot of myth associated with it. Living in California, most of us don't go around talking about how great our state is (the California thread in Misc. not included!

), it's just home. But when I have gone to other states and tell people I am from California, they immediately conjure up some strange idea of what life is like. That it's some magical fairytale land where we all live on the beach and it never snows or rains. I've also had people ask me how many celebrities I've lived near or met...that would be none. My point is that there is a mythical personality to California which makes it an easy place to write songs about. People who actually live in the state know that you don't go cruising to the beach in your convertible to go surfing while watching hot chicks in string bikinis on the beach every day, but if other people want to believe that California is a great paradise, then it makes a great song subject. Everyone wants to believe that a paradise exists.
So those are the reasons I have. California has a big personality associated with it, so it gets sung about. Much like many country songs talk about Texas, another state with a big personality. Sadly a state like North Dakota doesn't have much of a personality for anyone to write a song about it and then have the country immediately understand the meaning and feeling that you are trying to convey. Songs about surfer dudes in California we can all understand (whether it's true or not).