I can't disagree, but let's take this one step further. KDON has format competition from KEZR in San Jose, as well as KYLD, KMVQ, KIOI (and possibly one or two others) in San Francisco. KEZR is directly in the SJ submarket. If KDON was worried, it would be worried about the SJ station that puts a serviceable signal into their market, not the stations from SF that transmit from Sutro or San Bruno and never reach Salinas.
Also, I think the only station from the Monterey-Salinas market that has unique programming that's not duplicated in the SFBA is KPIG. If someone was going to go to the trouble of trying to pick up an out-of-market station, wouldn't it be KPIG, not a cookie-cutter format like KDON?
KEZR can’t be received well in Santa Cruz, or at least in the beach area. This may be due to local terrain.
As for your second paragraph, I’ll go a step farther: why try to pick up something out of market over the air when you can get its stream?