I think the problem comes down to having different definitions of value. Devs think it's 100% based on their code output or their communication with others or things like that which are quantifiable outputs that can be achieved relatively equally and remotely. Management has a different rubric, and yes maybe geographic proximity is on that rubric (for reasons unknown or no reason at all).

Does the value that a worker provide the company actually go down or not, if transitioning to working remotely? I don't think it's so clear-cut as to be an automatic and obvious no (that it doesn't go down). If management thinks it does, then they will only be proven right/wrong over time through the labor market and attribution or through financial results.

Of course, the opposite could well be true, and this how a market opportunity is created: managers who think the opposite, can put their money where their beliefs are, and hire/pay workers based on a different value-rubric, and if they're more correct in their assessment, then they might win out in the long-run.