This is my fear as well. Not only will I no longer have face-t-face interaction, and the break-up in my day that and office allows, but pay will probably decrease across the board.

Coming from a non-coastal state, I honestly do not understand the superiority complex a lot of coastal developers have. There are good developers everywhere, and the ones living in the southwest or the midwest are willing to do the same work for less money. But, you can be willing to bet the execs will receive a pay bump for their "cost-saving measures".