I agree that if you're working remote, cost of living should not really matter. But I also disagree that you should be paid an SF salary while working remote - part of the reason for the exorbitant SF salaries was actually the cost of living (and since you had to show up in person it made sense to provide for it). So likely remote workers should have more or less similar compensation, probably indexed to some median city in the U.S. - if you want to live in SF and work remotely - too bad.

Pure value rarely has to do with your salary; it's more about supply/demand. If we doubled the supply of people doing your exact job right now, your ability to negotiate (and your salary) would probably drop, even though you are delivering the same "value" to the company (unless value encompasses supply & demand).

(As I've mentioned above, I've seen pay differences in circus of 2.5X for performers with different passports doing pretty much the same exact job in the same exact show - the value they were delivering was the same, the only difference was country of origin). So pay is also about cost of best alternative.