Getting an H1B worker is significantly more expensive than someone domestic at the same salary. You have to pay lawyers a bunch of money, the employee can't always start when you/they want, and worse, right now the chance of actually getting an H1B is only something like 1/3. So there's a 2/3 chance that after all of the work of interviewing for this person, paying lawyers, holding a spot for them, they will never actually be able to work for you.

At any rate, I would like to see some empirical backing for those who want to raise H1B salaries higher than inflation adjustment.

The side effect you think is great, is actually really bad. It's not a question of developing more talent, it's the fact that people move to the coasts for jobs. All this really does is disadvantage companies not in NYC and SF, and make it more likely that they will have a labor shortage they can't make up, and pack up. This isn't reflective of anything though, except basically regional inflation (it's not simply that salaries in NYC and SF are so much higher because the companies there are the most productive and therefore deserve the H1B slots more, the salaries are partly inflated because cost of living is also super high, i.e. a dollar is worth less).