I struggle to see the mental leap many are making here.

Are you stating that cost of living impacts your skill level? In some cases that may be true but I think for what most are discussing here the causation would be the other way.

Growing up in a poor area may effect your skill level but moving as an adult from a high COL to low COL area should have minimal impact.

To me it makes more sense that each developer would command the salary that corresponds to their skills, and then adjust their COL in order to be comfortable.