The problem is, striking a balance. Growing the Tour of California does not have to come at the expense of a Grand Tour.
The races Hitch points out as having long and storied histories... they may not be as big as the Tour of California worldwide, but the Volta a Portugal is a bigger deal in Portugal, and the Vuelta a Colombia is a bigger deal in Colombia, than the Tour of California is in either the US as a whole or California alone. If the bottom falls out of cycling's globalisation drive, they're going to need the traditional races to still be around to pick up the pieces.
The Tour of California's hype has a double problem. For the experienced (and let's also accept sometimes snobbish) cycling fans, the self-aggrandising hype is a source of ridicule, as they can tell when it's patently not true. The continued beating of the Cali-is-such-a-big-thing drum in the face of evidence being to the contrary then causes them to deride it and take pleasure in knocking it down a few notches, rather than encouraging the race. For the novice fan the hype may be readily believable, but then when they tune in and find, as they did in 2010, a handful of big names, a handful of other big names not trying, and little actually meaningful racing, it becomes a letdown because the race simply can't serve up what it's promising the fans yet.
California could, in time, be a very good race. In time it may get itself up to the status of País Vasco, Paris-Nice, and the Tour de Suisse. But it won't be a Grand Tour. They look to have learnt their mistakes from the parcours of last year, and this year's parcours looks like it should provide a good race. But you have to walk before you can run. Enticing a few more big names and turning it into a very good - and desirable, this is key - one-week race should be a priority instead of hyping it up as something else. If you create a good race, people will want to win it, and that then brings prestige. Don't try to think it'll have prestige simply bestowed on it by money, because the money can always run out. The racing can't.