Compensation isn't just about value created, though. Costs, remote versus local efficiencies (cannot be assumed to be identical), and a given person's other options also enter into the negotiations.

The argument also goes the other way. The company pays you now for the work in the office and for the inconvenience you incur from commuting. No more commuting, so you should get paid less.

The company isn't paying for your time in the car but it is paying for the space your desk in the office occupies. Would you argue that someone who drives 30 minutes more to the office than an otherwise equivalent coworker should be paid more?

It's possible, isn't it? The person with the longer commute may be able to use it to negotiate for a higher salary. Particularly if they have another option with a shorter commute.

Perhaps I misunderstand you or have overlooked something.