San Diego is a city in the state of California. When the remaining members of a National Guard unit flee from the library after been overrun, they said that their destination was San Diego.
It was mentioned again during Season 2 as a possible destiantion for the survivors aboard The Abigail. However, George Geary mentions to Travis that San Diego was bimbed by the military. This action seems to fit with the overall aims and objectives of Operation Cobalt, as the military were trying to stem the flow of infected streaming out of major urban centres.