With the recent announcement that the Pac-12 Championship Game was at least temporary permanently moving to Levi's Stadium in Santa Clara, the predictable collective groan from all around the conference of fans complaining about the move started up. I agree with some of that displeasure, but overall this was the most plausible choice that the conference had in a Pac-12 world of imperfect choices.
The cold hard fact about the Pac-12 Championship Game is that there is simply no good location for the thing. Whether it is LA, the Bay Area, Las Vegas or Pullman, there just isn't really somewhere that works for the game and Levi's Stadium is kind of a necessary punt of sorts.
There are a number of facets that need to go into account when deciding where to put the game - ease of production for the conference and TV, ability to get fans to the game and fairness to both teams are probably the three most important. For the conference, the ease of them (and TV), broadcasting the game is far and away the most important. Keeping the game a short driving distance from their headquarters in a professional stadium is overall pretty much a slam dunk, but if you are reading this, you are not the conference, you are a fan, but (despite what that guy with the possibly NSFW avatar on the message board is saying) Levi's Stadium is also the best overall option for fans.
For fans, I believe that fairness is the most important factor when deciding on a location for the game, and while Levi's probably doesn't offer the ideal location for fairness (I think Vegas probably would be), it does of any plausible location. When making the game fair, the first thing that must be addressed is why having conference teams host the games doesn't really work and for a lot of reasons.
On top of the fact that, a neutral field is the only way to get a truly fair game, having a team host the game also isn't really fair throughout the season as it could give a team that plays in a weaker division, or draws an easy schedule a potential advantage. It also gives teams that have substantial home field advantages a distinct advantage.
For example, with the former format, a couple of years ago when Utah drew a schedule that had them missing Oregon and Stanford and playing in the South Division (When no one would argue that the North wasn't the superior division), easily could have finished with a better schedule than a North team like Oregon or Stanford that slugged it out in the North and drew the South powers on their schedule. Had Utah been stronger those years, this easily could have happened and had them hosting a snowy championship game against a better team like Oregon or Stanford and that really wouldn't have been fair and could have resulted in a weaker champion coming out of the conference.
Going back to that metaphorical snowy game in Salt Lake City, it also could provide unfair advantages to teams like Oregon and Washington with massive homecrowd-based homefield advantages and teams like Washington State, Utah and Colorado with massive weather advantages. It would be a shame to have a future situation such as this where a high-speed team, who played a tougher schedule gets grounded in a snowy environment and ends up losing out on the conference championship.
Somewhat related to this, Santa Clara is as good of a location as you could find out was for neutrality, as the Bay Area schools have the most mellow fanbases that are least likely to turn Levi's into an unofficial home game. Even the LA schools, who are frequently accused of being incapable of supporting their teams would easily turn any LA area locale into a home game.
The second-most important factor for fans for the championship game is probably the ease and enticement for fans to travel to the game and it is a very difficult situation regardless of location. Basically, fans almost always will have less than a week to plan and travel to the destination of the game and the problem out West is that things are so spread out that driving to the game for most teams no matter where the game is played isn't very practical and plane tickets will generally be high.
Due to the lay of the land, it is pretty much impossible to make it relatively easy for most fans around the conference to travel to the game, but once again, the Bay Area is probably the closest thing to a good option. Obviously the Bay Area schools can get there easily, the LA schools can drive there, the Oregon schools and Arizona schools can make intense drives and it is not too far of a flight for the other schools.
Overall, the geography and timing will always make things tough here for the Pac-12. Even a conference known for its rabid fanbases that also has a drive-friendly and central location, (Indianapolis) like the Big Ten, has struggled selling out their championship game. So this isn't just a Pac-12 problem.
Lastly, how many fans attend the game is a minor importance for fans. It is probably more important for the conference to sell tickets to the game, but personally, as a fan it takes away a bit of excitement from the viewing experience when the game is played in a half-empty stadium. The bad news here is that when dealing with the geography of the Pac-12, the fan bases of the Bay Area schools and the immediate nature of conference championship games, this is a problem that will be nearly impossible to fix. The good news is that it's not overly important for fans and at least Levi's will at least be a fair and good-looking stage to be half-filled.