Meh. If H1B were reshaped to actually be for specialist workers as it was intended (at least by some), then that's a lot easier said than done. I got to the US on a temporary work visa (not H1B because of loosing the lottery), and I'd find positions for somebody with my and a bunch of other specializations several times over.

By auctioning based on salary you're preferring areas with absurd costs of living - which is a) not where you necessarily need to get more people making the problem worse b) reinforcing economic inequality between areas of the country.

If there's a company needing some specialist somewhere with a saner cost of living, and they tried to find such a specialist, offering above market wages, what exactly is the benefit of not them having to pay twice or thrice the effective salary of somebody in SF/NYC?