It's not a perfect system, I'm sure. CoL is reduced to three fairly broad bands, and other pay elements like experience and performance are potentially skewed by remote status. But I think it's an appealing approach in general. Candidates know in advance what to expect and can move somewhere more expensive without needing to find a new job. Meanwhile, the company saves some money, but still gets access to remote candidates in expensive cities where they don't have offices.
I suppose it would drive away any remote worker who's consciously living somewhere cheap to increase effective salary, but presumably that's offset by getting access to people in DC, NYC, Boston, etc. who aren't open to other cost-saving remote jobs.
I write the code. I offer architectural decisions. I'm working on the most demanded features by the customers, bringing more value to the product.
What if I pair program on a feature from a person in SF? My efforts are still paid less.
Who cares if I wrote the code from SF or Vietnam.
I wish more remote workers would stand up to these businesses looking for a way to lower their costs.
As for the engineers, the whole "midwest nice", "flyover feebleness", "sure is great to just have an opportunity to work remotely" mindset has to change. Don't let them discount your value.
If you're already in a remote engineering position, show that you bring more value than Tom in SF, even though he's paid more.