By this reasoning, you'd expect to find the most "valuable" baseball players in areas devoid of professional baseball teams.
Something tells me you didn't completely think this through.
Gitlab is willing to pay high salaries for people living in expensive areas for essentially the same reason Google's dev offices are mostly located in expensive areas.
Why? Scarcity is dependent on demand. Something that absolutely nobody wants will never be scarce, even if the quantities of said thing are small in absolute numbers.
If there is no professional baseball team, presumably nobody needs a professional baseball player, and thus professional baseball players won't be scarce at all, but rather infinitely abundant and pay will reflect that by trending towards zero.
Whereas, there are many more software companies that pay roughly the same wages all of the world, and companies offer remote work, which will reduce the differentiation - but not eliminate it.
> there are many more software companies that pay roughly the same wages all of the world
The jobs with the really high salaries (and arguably the most exciting coding jobs) are disproportionately located in a handful of major tech hubs.
I question whether there are many companies that, aside from executives or other high value employees, pay similar salaries around the world. I imagine at least some pay comparable salaries across the US--or at least salaries that don't completely follow CoL--but pay Indian or Chinese developers what they pay Bay Area ones? That seems unlikely at any scale.
It doesn’t hold a candle to a bunch of guys in a room at a physical whiteboard, for the sheer collaboration bandwidth. Fully-remote has its use cases, but it doesn’t cover all use cases.
The issue is that today the people with the desired talent level are likely to have already moved to a HCOL area because that's where the highest concentration of available work is. You have to compete with the other jobs they could take that are scaled to the HCOL area.
Turns out popuplation migration is not instantaneous, spherical, or frictionless.
Maybe compensation/bonuses/promotions are the proper way to reward those who have proven their added value.