Camus' fiction is set at the crossroads: North Africa, Algiers, Algeria, the Mediterranean, places of extreme heat, poverty, drought, disease, and culture clash. In "The Guest," for example, there is war between the Arabs and the French colonists. In The Plague, there is a pandemic of Biblical proportions, easily spread by mercantilism.
Here, in The Stranger, we must have a setting that is not only hot, but a culture clash between Arabs and French and a judicial system that has the death penalty--not to mention: Algeria is where Camus lived, and he writes from the experience and insight of a native.
The novel must be set here. Camus uses water imagery incessantly: to set the story in-land would take away Camus' dominant symbol of life and fate, which is the sea. Also, Algeria provides Camus with a stratified social structure where the French are on top and the Arabs are on bottom. In fact, the Arabs are such outsiders that they are not even named: they are simply "Arab," "Arab's friend", "Arab girlfriend." They too are strangers in a strange land.
The title, L’Étranger, from the French, may be translated as "The Stranger," "The Outsider," or "The Alien." As such, it may be that Meursualt is L’Étranger, or perhaps it is the Arab. Are the French the strangers or the Arabs? In other words, Algeria is a setting that is native to no one: none may call it home. All are alienated by its geography, its social structure, its judicial system, and its extreme weather.
I just don't see that this applies with such rigidity to Shakespeare's London, Steinbeck's California, or Dosteovesky's St. Petersburg.