Sluggerdad,
This is a very interesting topic, I think. I just returned from San Antonio, TX and being with our son for his first trip back in a number of years to the D3 where he played. There is no shortage of players at the D3 level in TX.
I tend to think the answer is very multi-factorial:
One consideration is geographical. In our/your area of Northern CA. a HS senior/junior would not have a very good reference point for D3 baseball/college since there is none. Even though they are a pretty solid team this year, some might use Menlo College (now NAIA) as a reference point for the school and baseball and not find it attractive for either.
One consideration is very regional nature to D3 and the fact that great universities exist which good players and students never learn about because of the mostly regional aspects. Getting players and parents out of their geography to see what diversity exists in D3's throughout the Country and the quality of the play and programs at D3 throughout the Country is a big issue, in my view. Our son's college coach is hugely successful to the point where the guy sitting behind us last weekend in Texas looked at the program and marveled at the number of starters and player from outside of Tx and as far away as Canada.
Another consideration is the impression of the quality of play, without reliable information. I would point to a number posts on this site about D3 as an example. What many don't realize is what I saw last weekend: The starter for game one for one team was 88-91 and a pro-prospect. The closer for the same team in game 3 was a sophomore who was 89-92, a strike thrower with a hammer of a hard breaking ball who is also garnering scout interest. Doesn't hurt that the SS, 3B and LF all made All Star teams in the top Summer leagues last Summer and have considerable interest for the June draft.
Certainly, desire and the intensity to continue to play and compete because of the love of baseball is an overarching factor. D3 baseball gets "lost" for many when it is contrasted with the lure of being a spectator at a top 25 D1 football/basketball school. What does not often gets measured is the "rear view" mirror. One of our son's HS teammates was a terrific athlete and player. His parents were highly verbal in questioning our son's D3 choice in Texas. Their son would attend and play only at UVA or he was heading to a large school for fun, which he did. Since graduation, he confided how he wished he had stood up to his parents and followed a path like ours did and continued to play and compete in baseball.
At its core though, in my view, is the fact that D3 baseball does not have visibility in the media. Impressions for parents and son's are so much developed that way. If anyone watches OSU-Michigan football or Oregon-Oregon State baseball or Duke UNC basketball, how could they possibly have a reference point for comparison for D3. If someone has not seen how much fun it can be to compete and succeed at the D3 level, it is pretty easy to not "miss" what you never knew existed.