The 1980s and California seemed a natural match. You could make a decent argument for the 1950s, but in my opinion, the Eighties were the best time to be living in California.
Hollywood has always been Hollywood, but in the 1980s, California was the setting for so much that came across movie and TV screens. Think of these productions that captured the essence of California:
I Love L.A.(Randy Newman's music video)
The Karate Kid
Better Off Dead
It Don't Mean Nothing (Richard Marx's music video)
Bill and Ted's Excellent Adventure
Back to the Future
Free Fallin' (Tom Petty's music video)
Lakers games the whole decade
Valley Girl (the song more than the movie)
Even bad movies captured California well -- think "Less Than Zero." And yes, California wasn't perfect in the '80s, with its violence, smog and the Clippers, but it was still incredibly unique.
California dominated the decade not just because of the southern part of the state. Consider what was happening in the Bay Area in the Silicon Valley, with the explosion of the computer and video game industry. The video game part of this explosion was reason enough for me to pick this decade for California -- as the industry expanded in the early 1980s, the state was ground zero for new games. Maybe I'm over-glamorizing this, but playing "Tron" in California must have been a slightly different experience than playing it in Chicago. You weren't just experiencing the California culture in the 1980s, you were part of it.