There are normal software developer jobs where it is nearly impossible to find anyone qualified even when one has no significant price sensitivity. We know such people exist because we have some on staff but expanding the pool has proven to be difficult.
For some segments of the market, the skills shortage is legit.
Well, if you're looking for someone with a year's experience at a start up with decent JS/jQuery skills, some experience on iOS and ruby and hobby stuff on the side...
Have a look at my profile. I'm a pretty bright guy with a track record of learning stuff that most people struggle with, but so far have had an unsuccessful job search in SF for 2 months due to pretty much everybody wanting an expert.
Edit: If you're looking only for those who already possess "expert", "ninja" or "rockstar" skills, then please don't email me.
Most hiring happens in the formal way. Now, if you actually have a network of highly skilled associates, then maybe that's not true. But such networks exist in tiny pockets as in SV.
I'm sure you've heard of Fizz Buzz - http://www.codinghorror.com/blog/2007/02/why-cant-programmer... - is that too difficult a problem?
Then there's the fact that recruitments for managers and lead engineers outnumber those for junior-level programmers and testers, and nobody is taking the effort to train junior-level employees up to the skill level that they are looking for.
A company could also have obscene contract terms that highly skilled employees with good job prospects will turn away from. Things that I've seen or heard about include non-compete clauses that are broad enough to force you out of the industry for up to three years after leaving the company, NDAs broad enough to prevent you from blogging about your whole industry or even mentioning that you work for the company, surrendering all copyright to everything you have ever developed or would develop independantly of your work at the company (California law allows you to have personal projects regardless of contract terms so long as they're unrelated to your work), and pledging to never sue the company under any circumstances no matter what they do to you (objecting to that one cost me my last job). Word can get around about these things, and the most skilled employees with the most job freedom can afford not to bother applying to certain places.