One of the lines that we got for the reason they chose Indy was that it was "centrally located" and easy to get to for the majority of the country.
If you draw a 500 mile radius around Indy, you cover a lot of ground - St. Paul, Lincoln, Little Rock, Atlanta, DC, Philly, Buffalo, Detroit, Toronto, etc. If you draw a 500 mile radius around LA, you cover a lot of California, a lot of desert, and a lot of ocean.

Anyway, to keep the rumor buzzing, here's some info that I got from an e-mail list I subscribe to - the LACocnCenter did in fact make a pitch for C4. Here's a brief exerpt:
I've been working with the LA Convention Center and Visitors Bureau on
the bid to get Celebration to LA for months now. Blame, me, flame me,
whatever- but I drove 4800 miles round trip for C3 and wouldn't mind it
a bit closer this time 'round. Proximity to Hollywood and San Rafael
might allow us to see more "A-List" actors show up, and perhaps a bigger
LFL archives exhibit to boot- we had 120 props and costumes at FIDM..
And the LACCVB and City of LA is incredibly behind this convention- more
than I've ever seen an organization gear up for something that is just a
potential event. They want it to happen here, and are willing to do what
it takes to make it work.
When LFL and Gencon came out to tour the LA facility, we presented a
large unified front of all the fan groups in the Central/Southern
California area. There are several thousand of us in the lower half of
the state... In an informal poll, I found it interesting how many of
them made the same arguments about not attending Cs 1-3 that are being
made here, but will now bend over backwards to volunteer if it is on the
west coast. I left a lot of friends- some bigger fans than I, if that's
possible- behind when I went to C3; they just didn't have the means to
travel to Indy. I'd love to see them get a shot at going to a
Celebration, but am not thrilled that others of you may have to face the
same decision they did for the previous three cons.
I guess we won't know until we know, but it sure sounds like LA tried to land it...