The more I think about it, the less amusing it seems to me. I think it can be done to make a parade that well represents the spirit of California but you have to make it entertaining. If it isn't entertaining I rather keep the Pixar characters.
After alot of thought, I just can't see an entertaining, historically correct Californian parade that covers the entire story. Therefore, I'd say keep the Pixar Characters on parade, and then have the rest of the parks entertainment tie into the Californian theme.