How does it defeat the purpose? Saint -only- goes to AL tournaments. When you look at the PR, first and foremost, it says, "If I went to a tournament with Alabama regulars, these are the people I'd have to watch out for." Saint doesn't go anywhere else, and he's apparently someone that people need to watch out for. BigLou and Kismet go to more Georgia tournaments than Alabama tournaments, so they count as GA, not AL. If Aloha stopped going to AL tournaments entirely (which would be stupid, in this case, since they exist closer to him than LA), then they would probably consider putting him on there, if only because he isn't a part of the AL community in that case (at least, not in the "regular" sense).
If that GA Ike player at HASL primarily went to AL tournaments and did well, I'd be all for considering him for the PR, but, he doesn't. Xaltis doesn't regularly go to AL tournaments, and attends FL tournaments significantly more often, so this point is moot. That is a horrible comparison.
As Kola said, North Carolina has out-of-state players on their PR. Actually, when I was PR material in Melee, I was given the choice to either be on the Mid-South (AL/AR/TN/MS, or something) PR or the Georgia PR. Everyone was okay with it either way. You are wrong about it never being the case, both in Melee and Brawl, and you're wrong about what "makes it tacky and unprofessional." No one else seems to mind but Rag and yourself.
There is no clear-cut ruleset for making a PR. If the scene grows and people start talking about making it a Top 15 list, will you get upset? Why do we have to conform to arbitrary standards?