This concept of Jazzpunk is actually closer to reality than normal Victorian steampunk. The reason for this is that most "pure" steampunk taking place in the 1800s or other-worldly equivalent don't have much in the way of electricity, but by the 1920's electricity was well known (but not so widely available as today), and so were things like the Wright brothers' airplane (1900 to 1903). Steam powered machines were still widely common in the early 20th century, and many things that would be considered technologically advanced steampunk gadgetry actually were created.
In fact, a Steam-Powered Tank was built during World War 1!
(Wiki link)The only thing that would differentiate this Jazzpunk from how real life turned out is perhaps steam isn't phased out completely. Maybe Tesla never experimented with electrical currents, or batteries were never fully developed. With normal steampunk, a lot of technology shown was simply not feasibly available or developed by that time, but in a time when there was already plenty of existing technologies (gas powered cars, electrical appliances, telephones, even the beginning of the TV age and the earliest stages of atomic power), you are replacing or even augmenting existing technology with steampunk technology. In some cases, such as Jazzpunk, this won't tip the balance much at all. You'd probably get something like BioShock, but a couple of decades earlier and with a lot less electricity (SteamBlast instead of ElectroShock, anyone?).
I won't argue that the aesthetics of Jazzpunk are appealing, especially if mixed with art nouveau giving way to art deco, and that whole pulp fiction type of atmosphere.
