Your last paragraph is very similar to what I've read is going on in the European Union with the Euro. (I don't remember what book I read it in)
Basically their argument was that it works in America because the federal government is strong enough to redistribute wealth to places that can't keep up. In Europe the federal government is weak, so the southern countries have an economy they can't keep up with.
I don't remember the specifics, but that was the gist of it.
I've read that another problem is that unlike in the US with its relative cultural homogeneity, people in Europe are less willing to move where jobs are. The result is less efficient population distribution. EDIT: fixed typo.
In the US that ability to move where the jobs are is creating a concentration of prosperity in certain cities. Often those with above average skills are able to move, leaving the others behind.
This leads to overcrowding in cities like NY and SF. Layer in economies of scale, increased competition, and better talent pools, and it becomes increasingly difficult for other areas to compete. Creates a kind of feedback loop which increases the geographical wealth disparity.
The only thing that seems to balance that is the increase in cost-of-living in those areas.
Basically their argument was that it works in America because the federal government is strong enough to redistribute wealth to places that can't keep up. In Europe the federal government is weak, so the southern countries have an economy they can't keep up with.
I don't remember the specifics, but that was the gist of it.