Fully agree. That's why H1B's should have a significant minimum requirement for the salary (depending on place). I'm in eastern Europe and I wouldn't even remotely consider Bay Area jobs with less than 250K annual income (base salary + bonuses). Even for other places, it shouldn't be far from that number for me to decide to relocate to US...
So yes, there is a shortage of talent who are willing to work for cheap.
Oh my, I would be curious to know what kind of company offers you such a high living standard in Easter Europe for you to throw any opportunity under the insane amount of 250k...
If I agree that you need more in the SV to live comfortable than probably anywhere else in the world, 250k$/year is an insane amount of money.
A decent home in a good school district is around $2.5m in the Bay Area, so $250k before taxes might get you qualified for a mortgage (provided you saved $500k for a down payment). $100k, while above U.S. median household income, would not go very far in the Bay Area.
Even in Eastern Europe, there are places with very high standards of living for talented developers, such as Prague or Warsaw. With the EU, Berlin, Vienna and Munich are now possible as well and have a very high standard of living.
You can buy a SFH for much less than $2.5m (more like $1m) in good school districts (the best districts are more like $1.5m+). Perhaps not in Mission San Jose, Los Altos Hills or in San Francisco proper, but many many places with a good commute to most of the valley.
For public high schools with a GreatSchools' score of 9 or 10, there are $1.5m 3BR home in places like in Fremont, Dublin or Campbell, but would be a bit of a commute to places like SF, Palo Alto or Mountain View where a high concentration of $250k+ per year jobs are.
So yes, there is a shortage of talent who are willing to work for cheap.