EDIT: But let me specify - the original premise to this was that there are already two comparable candidates in SF and somewhere else in the world.
I've worked with overseas devs who I'm pretty sure were smarter than me (PhDs, ability to go deep on tons of technologies) yet didn't have the skills needed to quickly turn around a request from a business person and build the right feature.
I think salaries will level out to a certain amount inside the US and other countries - but it's going to be a long time before highly competitive companies wouldn't be shooting themselves in the foot by eliminating themselves from consideration by coastal devs, experience-wise - but cross-country language and communication barriers (especially when timezones are involved) will remain very high.
Companies have already been trying to do that sort of outsourcing for 20 years, and yet US salaries have only gone up in that time frame. Solving "working remotely in the US in a few timezones" is a very different problem than solving the persistent, unsolved-for-decades "hiring programmers in a different country" problem.
I think this will normalize over time, but it will normalize to no one getting good mentorship as all the senior folks work remotely.
For the discussion, let's assume that the whole world of IT candidates is now your pool of potential employees. India alone seems to produce around a million computer science graduates a year. Europe, probably in the same ballpark. Rest of Asia? Who knows. Same for Central and South America. That's each and every year, new candidates that are added to the pool (minus those removed).
Even the absolute outliers would result in a sizeable number.
You are right, not all of these might have the required knowledge (if looking for experience hire), or some other number of factors.
But it would probably be easier to just start poaching top talent from top companies around the world.