Bob,
I think you are right, in that there could be a very good synergy if both could be held at the same time in the same place. That is the basis behind Photo Arts Santa Fe and I believe Fotofest Houston; they have multiple things going on at the same time, and the total is greater than the sum of the parts. I also think the Silver Conference would be a logical one to combine with for the same reasons.
The VC Conference isn't just analogue, however, so there would be a somewhat different market in the sense that I believe many APUG people are not interested in digital and would prefer to not see it at a conference (in a similar spirit to keeping digital off the forums here), but many VC people are interested in digital. That could be an inherent conflict that may be problematic.
I can't speak for Steve, but I do know there was pressure to have a show in the midwest, and having it out of the US is a problem for the tradeshow for various reasons related to regional coverage of distributorships, etc.
Maybe it will be possible to have them in the same location in the future.
---Michael