I'd respond that low-cost areas, when compared to San Francisco, includes something like 90%+ of America. Presuming all talent must come from the coasts is missing a pretty wide swath of very qualified candidates who speak your language natively, who went to top-flight schools, and who live/work in or near your time zone.
Yes and that's one reason why I would expect to see companies that go more heavily remote hiring preferentially from low cost areas of the US rather than China. (Along with IP laws, etc.) As I say, I'd expect more remote jobs to flatten out tech salaries a bit--especially within the US. Mostly not 100% but if I don't need you to live in the Bay Area, I'm probably not going to pay you extra to live there any more than I'd pay you extra because you want to live in Aspen.
Obviously the post-covid world may be completely different, but my personal anecdata is that my income went up when I went fully remote over a decade ago. Instead of the hand full of local large employers competing for my labor, the whole world is competing for it.
It's important to remember that these economic concepts flow both directions. Power dynamics fluctuate over time, but don't let anyone convince you that you're always on the short end of the stick. You're not.
