I wonder if they are staying out of CA because of the high density of Trader Joe's stores. Trader Joe's is known for moderate cost, high quality food that pretty much stays the same in terms of product line. They tend to carry a successful product for years before they decide to drop it, and usually they drop items only if they don't sell well.
I am accustomed to Aldi in Germany and enjoy shopping there. In Germany, at least, they tend to have a lot of close-out merchandise (non-food) that, once it's gone, it's gone and you never see it again. Like a cross between Trader Joe's and BigLots. Tesco of UK started an Aldi-like chain of small neighborhood markets in CA called Fresh & Easy, so for Aldi to start its own-brand markets here might make for a crowded field.
I had been shopping at Trader Joe's for decades, but they really took off during a prolonged 2002-3 strike at some of our major supermarkets: Ralphs, VONS, and I believe maybe Albertsons too. People who only shopped TJ's for specialty items like candy or chocolate or coffee or nuts discovered it had quality fresh foods at moderate prices. And they discovered they could get along fine without the supermarkets.