Yeah, the GM can do it (when I collapsed the entire Hollywood sign hill in my Live and Die in LA Game and caused a real earthquake with the citywide "Waiting for the Big One" aspect in response to a player using an "earth tremble" type spell that's what I was doing. I guess I owed one PC caught in it a fate point, but everyone else affected was NPCs. Everything else it did to the encounters going on was cosmetic and interesting, but not at the level of a compel.)
Had Ian (the player) attempted the same thing he'd have had to pay similar costs for a zone-wide maneuver (which lets you do a free tag on the entire zone), and he'd have to pay for the size of the entire city, which would be something only likely to be achieved with major ritual magic. (as Cowl did when he hexed the entire city of Chicago).
One advantage of being the GM is you get as many fate points as you need to have something cool happen. Players have a fair amount of narrative power, but not to that degree. A player could invoke "Waiting for the Big One" to have a minor earthquake happen city-wide with a single fate point, but it would only have a significant effect on one visible character (where in my scene it endangered a dozen or so police officers and one PC).
If it's cool enough, of course, the GM can always step in with whatever fate is needed. To some extent, so can sponsored magic, but that kind of debt is often career-ending, similar to a death curse.