This is a strategy used by Accenture's ATS division. Teams of 100+ engineers deployed in the US, being bused to hotels and given meal vouchers at night, while earning Indian wages.
THere's a huge secondary benefit (to the employee) for L-1s, though. Spouses pretty much automatically qualify for an L-2, which allows them to work at-will in the US, too. So, even if the L-1 worker is severely underpaid (based on prevailing wages in their home country), their spouse can apply for a job paid using the US salary standards. L-1 also allows for immediate Green Card application, and is a much smoother path toward permanent residency than H-1B.
I think this is fine if it actually is temporary. As they're getting general living costs on top of their regular salary.
ie accommodation and food
And are these 100+ engineer forced to accept that term? Or more likely they think it's a good deal for them (i.e. living in India earning Indian wage)?