Yeah, I'm calling East Coast bias. It's just like the BCS... stupid SEC, stupid GW. No round 2 for me and no shot at a national title for USC.
More seriously, I do find the distribution strange. It makes it really hard for a lot of the first round qualifiers to go on to round 2, considering where the first round stuff was hosted in some cases. Looks like a bit of failure to plan to me, but that said it's great fun and a chance to play so I won't get too down on it.
What I've heard the second round was set up by the trade sales GW reps so maybe they went with stores they have a closer relationship.
Population density / number of first round entrants might explain some of the distribution as well. Some states may have run more first round tourneys than others.