I was just a child when the song came out, but even then I well understood the message the lyrics convey: living a lifestyle in excess in a land that was once full of promise, but the excess and abuse of those now living there had spoiled the promise that once existed. Don has never said that the lyrics mean any different. The lamentable fact is that Don felt he was commenting on the state of affairs in this state in 1976, but now almost forty years later, it is all of that and so much worse.
We live in a state that should be (and used to be) a magnet for people all over the country and indeed, the world. But the state has been so mismanaged that quality companies and the middle class that work at them are leaving in droves; the only ones seeming to be left behind are the very rich who can afford to live wherever they want and the very poor that serve them. Any time this happens, the very fabric of a society starts to tear, which has definitely happened here. The one irony that exists is that it is the liberal policies that the state has embraced (which Don in general supports) that is the main cause of this destruction to the state, not the fact that some strung out hippies are ODing in a hotel somewhere.
I used to think it was something of a sad song when I was a kid, it is even more so now. That KRTH and other stations play it like it is some sort of an emblem to be proud of without the hint of any of this irony is a sad affair unto itself.