This is a good list! 
I don't think there can really be any reasonable doubt that they were right to pick Midgar as #1. Lots of great locations have appeared on the PSX, but the Midgar skyline in the FF7 intro is certainly the most iconic; it's the video game equivalent of the pre-9/11 Manhatten skyline, and the city itself adds so much to the atmosphere of the game. It's the only one of the locations on the list that any serious videogame fan can recognise, which is what separates it from the rest and which is what the list is about. If you show Shadow Moses to someone who hasn't played MGS they probably won't know what it is. If you show Shambala to anyone who hasn't played Uncharted 2, they probably won't know what it is. But if you show the Midgar skyline to a videogame fan who hasn't played FF7, they'll say: "That's Midgar!". And that, mes amis, is why it's the most iconic location on a Sony platform.
