I'm with the OP. Moved to DC 10 years ago and have moved around central neighborhoods until settling into a condo in a neighborhood that I really like 5 years ago. On a cost per sq foot basis, our place is very expensive compared to the Midwest, but my wife and I have lived very comfortably for 5 years in a 800 square foot condo and have no plans to move. I look at my structural expenses, and sure the mortgage is steep, but with a 15-year fixed only about $600 of it is going to interest and DC real estate taxes are super low. The idea of car ownership is laughable to me, especially with car2go around to rent by the minute, so that doesn't register as an expense. Trader Joe's is nearby and a well-stocked fridge under my desk keeps the lunch costs low. The biggest challenge to Mustachianism in DC is the sheer number of new restaurants and bars that open up around me and the fact that my friends, while by no means extravagant, often want to try them out. I succumbed quite a bit to lifestyle inflation for a few years before finding this blog and am in the midst of ramping back down to the frugal lifestyle I had when I made less money.
As the OP mentioned, jobs are plentiful here and life is good, especially if you can avoid the commute from the burbs. I may move to another part of the country or another country altogether when I FIRE, but that will be more for the variety of life experiences than for a lower COL.