I'm a Texan IN California and I loved Arnold's line about my home state. He's absolutely right.
He may be right...but being right doesn't necessarily win votes (or in this case prevent giving your opponent "red meat" to drive up their turnout). I'm not calling it fatal, just an unnecessary tactical error. He'd have been better advised never to mention Texas -- remember all those "Texas" companies that were vilified by Democrats in California over the energy debacle. That came from unions -- unions are extremely powerful, still, on the west coast.
It was, fortunately, the only thing I saw Arnold do that could provide any ammunition to the RATS -- everything else was squeaky clean. But it was unnecessary.