Valid points.
When considering the local market for Disneyland, I think it's fair to say that "local" means anything within a 90 minute freeway drive of Disneyland. And that definitely includes San Diego. I can make it from Anaheim to downtown San Diego in about 80 minutes going with the flow of traffic. I've made it from Disneyland to Palm Springs in the same amount of time.
Including the San Diego metro area in the Disneyland "local" market, you get about 22 Million people living within a 90 minute freeway drive of Disneyland. Plus the 14 Million international tourists who visit SoCal annually, and the tens of millions of domestic tourists who visit annually from other American states.
And there are only 3,000 Disney owned hotel rooms at the Disneyland Resort, in three hotels. And just 50 DVC units (48 two-bedroom villas, 2 grand villas), only found in the new wing of the Grand Californian Hotel. Not sure what that means, but I'm sure it means something.