The system allows it, why not take advantage of such.
That would boost wages for all other workers and discriminatorily raise costs against orgs that do not want to “hire American”.
That’s fine too. If it’s too low, companies can lobby to have it increased. If it’s too high, workers can lobby to have it reduced.
There is no fixed sized pie. How many big tech companies were founded or run by immigrants or their children?
The auction system to maximize the fees collected would apply regardless of the number of visas.
The various body shops are one thing, but I've seen multiple large companies where they have incompetent individuals of the same nationality under a manager (maybe second level) as well - whole teams. 75+% on H1b. These are "wage draining" visas, not special skillsets.
If it was actually special skillsets, I agree with you.
But FAANG isn't going to leave Silicon Valley. If your theory says that's a good idea, you should ditch it for one that has empirical evidence for working.