For "exceptional" people, there's the O-1 visa category. But candidate no. 1 likely would not qualify.

You seem to think that the H1 program should place candidate 1 over candidate 2.

Let me give you a counterexample: Suppose you are hiring candidate 1 to write an app that will help you single men find hot women to date in a 5 mile radius in your 4-billion dollar, VC-backed startup.

The second candidate is being hired into the body shop that has been contracted to develop a UI for a CAT scan machine produced by a major healthcare company.

Now tell me who should be preferred.

It's possible to make many value judgments like you and I have done, but at the end of the day they can't all be incorporated into the immigration law. Making the market the arbiter of what's valuable appears to me to be the least bad option, and strengthening that is the best, given the constraints. It still won't make the law conform to everyone's tastes, though.