Coming from a smaller, indigent state (Louisiana) I completely understand the City Council's action and attitude. In Louisiana, state and local governments routinely prostrate themselves in the name of attracting businesses, especially large companies. Unfortunately, in Louisiana it usually ends up that they "give away the store" to get the store; it ends up costing government/taxpayers far more than the business gives back in taxes, fees, goodwill and physical presence.
The small town I used to live in made all kinds of concessions to attract a horse racing track and casino after it was outlawed in the parish (county) just to the south. Net result: some revenues, I suppose, but a marked increase in use of law enforcement to intervene with out-of-control patrons. I saw a huge increase in the number of patients involved in MVAs, slips and falls or passing out in the casino; I worked in the local Emergency Department. The track was a magnet for undesirables and compulsive gamblers. (Good for horse owners and jockeys, though!)
And the city I lived in (and the parish government) offered so many incentives to get WalMart to build a distribution center just north of the city, complete with road improvements, infrastructure buildout, etc. There were droves of unemployed people lined up to try to get work. And the parish and city coffers, while not overflowing, are definitely deriving the benefit. The distribution center, however, disrupted an undocumented Native burial site (protest was immediately quashed) and the truck traffic to and from the center had an immediately noticeable, detrimental effect on the nearby Interstate highway and other local 4-lane roads.
I would think the Apple HQ construction itself will bring mega-dollars to Cupertino (all those construction people have to eat, live somewhere, shop, etc.), definitely benefiting the local economy in the short term. And at least Cupertino will have an architectural icon associated with their city and a company presence that should last a very long time, complete with economic benefits.
I can't fault Cupertino's interests at all in this situation. It's a huge win for them.