I love Dr. Sowell, but it is fun to point out the 0.56% of the time where he is wrong. And this is one of them.
Some of the most thoughtful people in America (cowboys, for instance) live in isolated mountain valleys. And some of the dumbest live astride international crossroads of commerce, cultures and ideas from around the world and manage to adopt the most degenerate from each. Think San Fransicko.
You’re mis-stating and twisting his point.
He said, “... expected to develop their own intellectual potential as fully as ...”.
His point about general trends among groups of people in no way contradicts your example about particular individuals. He didn’t say the people in places like San Fransicko would always adopt the best of everything they’re exposed to. But a group exposed to lots of outside ideas isn’t limited to just what they come up with on their own (good or bad).
But your example is weak anyway. American cowboys in “isolated” mountain valleys aren’t really isolated; they have access to nearly all the news and information the San Fransickans have. Indeed, the cowboys can easily get news about San Fransickans (and learn from it); the San Fransickans are somewhat less likely to get accurate information about the cowboys. So maybe your example really supports Sowell. :-)
Isolation was more of a factor in the past than it is today. But there are still places in the world that are MUCH more isolated than rural American folks. Nowadays the causes of isolation tend to be more political than geographic.
But these people are all members of a far larger society that straddles the continent, not a unique nation and culture unto themselves. The United States was not as severely impacted by geography as some nations, such as Japan or Germany, or at least in a negative way. And modern advances in technology, such as transport and communications has blurred the regional lines in America even further.