I'm much more offended by that than by the misappropriation of European place names.
IMO if a California wine says "Napa" anywhere on the label, it should be made from fruit grown in Napa. Period.
A European place name on a (say) California wine is an obvious nod and a wink to a style from the Old Country - sort of an homage. I don't fret about the term "California Champagne" because everybody knows exactly what that means, and is aware that the wine isn't from Champagne, but is merely made in the style of wine from Champagne. I know that really irritates the French, but AFAIC it's pretty much a non-issue anymore. Most wineries no longer do it.
OTOH, I'd expect a California wine labeled "Napa Ridge" to be from a vineyard overlooking or in the Napa Valley. The French (e.g.) are very picky about such issues within their Country, and rightfully so. They sure as hell wouldn't allow the words "Rhone" or "Burgundy" to appear on the label of a bottle whose contents came from the Midi. Neither should crappy California wine from the Central Valley be permitted to use the word "Napa" on its label.
Tom S