I'm gonna just argue a bit why I think NYC is a terrible idea, nothing personal ArthurQ, I like NYC too, and I know plenty of people I could stay with for free down there
It's expensive space (as you've stated). It would cost a
lot more to run a con there, on the business side of things. You might get more people wandering in, but I would bet ticket prices would have to be higher. Someplace like Boston might be better if you're dead-set on having it in the northeast.
Transportation. It doesn't seem like it would be one, but it would be. Driving anywhere down there is a total pain, especially if you're not familiar with it, and for people unfamiliar with the subways and buses it can be quite daunting. Most people I know like to have their cars anyway - a big draw for Indy IMO, or a smaller city.
You mentioned it, so I won't go too into it, but NYC is
expensive to be in. Many places on the east coast don't have near as high costs of living, and while people from NYC don't really think about it too much, it's definitely something you notice if you're not from there.
Also, there may be a lot of hotel rooms down there, but they will probably be for the most part over-priced for what you get compared to what most people are used to. Again, this ties into the fact that NYC just costs more to be in.
All-in-all, while I personally would enjoy having one in NYC, I think overall it would be a better idea to pick a city like Boston or DC for a con. Like you said though, there already are a lot of cons, so having one on the east coast isn't too likely. And realistically, Indy isn't too far out of the way for most of us north-easterners.