Anytime you link a legal requirement to salary levels, you end up with geographic cost-of-living disparities. 100K in NYC/SF is no big deal, 100K in Clearwater, Florida is. A person who can easily get a greencard in NYC can't do so in Florida. This makes the law unfair to states with lower cost-of-living because employers cannot hire and keep skilled employees even when they are willing to pay very competitive rates.
Anyway, you make a good point about cost of living issues, so some sort of local indexing would be a good idea.
To me, the most important thing is that we include other professions in the "market rate". As it stands, even if H1Bs pay market rate, they can still put a damper on wage growth, while other fields without extensive guest worker programs sprint ahead. So I'd say "if there's indeed a shortage, what other professional degree paths are getting these students?" So in this case, they'd need to make sure that grads of top engineering schools who get visas are not paid significantly less than grads of comparably ranked law and business schools. This would protect against the use of visas to cause wage stagnation in engineering relative to other professions.
chime - why would it be easier to get a GC in NY as opposed to FL? How then is FL at a disadvantage because of the salary rules?