Huck, you need to think of models as components. If you model a McDonald’s restaurant, later you’ll want to insert copies of it at many different elevations, all over the world.
The model has a local coordinate system based upon it’s local datum (the model’s internal origin,) which is the insertion point for the model, as a component, into the world coordinate system.
The elevation information, in the “GeoReference” attribute dictionary, “ModelTranslationZ” attribute is the z coordinate, where the model component is inserted in world space.
You cannot have objects miles from a local origin within SketchUp. It causes clipping issues, and makes entering distances into the VCB problematic.
See: Examples of the “GeoReference” Attribute Dictionary
And: About the Attribute Inspector plugin
Here is an example of someone having issues, because the model origin is far from the geometry: