I really do think the 'people are jealous because we have done well' argument does explain it to some extent. We were regarded as the new Manly for quite a while in the early 2000s. They have a similar membership level to us and they have been quite successful in the past few decades as well.
Yes, you are probably right about the geographic distribution. We also have a large base in Canberra and in parts of QLD as well.
The Demons' last flag was in 1964. I follow them. Nobody could accuse me of getting on the bandwagon! There are other examples of successful teams having low crowd and member numbers. North Melbourne is a good one. They were arguably the team of the 1990's, and yet have one of the lowest bases in the AFL. They, like the Roosters, have a small geographic and junior area to drawn on.
Sydney is a saturated market, but it is just not cool to follow the Roosters. Other supporters think we are the glamour club, with all this money, so they, in typical Aussie fashion, dislike us for that. While I do not really care, I do think that that is the obvious reality to some extent.
Sydney is also not like Melbourne. Sydney fans, by and large, are more fair weather and fickle than Melbournians. They do not seem to be rusted on to their teams in the same sort of numbers as our friends down south. I think that applies across the board, in the game.
Anyway, we could argue to the cows come home, but I don't think it is as straight forward as some might like to make out, that's all.