It was reported early on that Joss Whedon was going to shoot most of Marvel's The Avengers in Manhattan, which makes perfect sense for the fact that that is where the story is set. Now word on the street is Whedon will now be shooting the majority of the film in Los Angeles, and that the New York portion of the production has been cut down.
But why the location change? Because it saves Marvel money of course. Marvel is known for pinching their pennies. For those of you who don't know, the accountants run Hollywood. So if you want to break into the business, I'd say becoming an accountant would be your best bet.... I'm serious.
Bleeding cool says "keeping the production in commuting distance to all those swanky LA actors’ homes will help smooth over the filming of an ensemble movie with a bunch of big names on smaller salaries than they might otherwise expect. And on Marvel Studios part, now they don’t have to pay to put them all up in style in New York for a few weeks." They're just saving money where they can.
I don't think the location change will be that big of a deal. Hollywood has been shooting New York in LA for years and no one even notices. I don't suspect that the location change is going to ruin the movie.