We get to play the Hyrule Warriors demo at any state now, and yet a new Smash 3DS demo is still limited to California only? That's just very disturbing news there.
As a Californian, I have to say that us getting the demo is bull****; we just got the game in Irvine! But this has nothing to do with playing favorites, and more with geography.
There is something in Geography called "space-time compression/diffusion" that basically means that the closeness of certain states, continents and countries have nothing to do with physical distance from one another, but the relationship established between them. Let's say New York got a demo of the game, you would expect it to show up near Rhode Island, right? Well it won't, because California and New York are connected through things like Flight, Fashion, non-conformity, trend setting, individuality etc. These abstract connections make it more likely for things to travel between states. The same concepts apply to Japan and their "closeness" to New York and California, which is why you'll see them here more.
Another concept that comes into play is also hierarchical diffusion, which means that things travel from the top to the bottom in terms of socioeconomic status. If a hot piece of clothing was released by a designer, where would it go? It would go to Milan, to Fashion Week, to New York and California (available in high end retailers), then probably pass down to lower high end brands like J Crew, then the GAP, then it will finally be available at the bargain bin at your local JC Penny. Same applies to smash, available to exclusive audiences in E3, then to upper scale cities like San Francisco, San Diego and Irvine, then Anaheim, then it will be available to Los Angeles and other neighboring cities.
It sucks that other states get the short end of the stick, but based on my observation this seems to be the case. Is the concept bull****? Yes. Is of unfair? Yes. But it definitely is practical from a financial standpoint.