I don’t really buy that argument. I doubt that there are lots of skilled engineers out in rural places just waiting to be tapped by remote work. Skilled talent clusters around the jobs.

I suppose there’s the international aspect, but that isn’t what is going on here.

You're going to be shocked when you realize the number of people who don't want to move to San Francisco. There's a smaller but still substantial number of people who don't want to deal with living in any dense metro area. There are even plenty of people who don't want to move very far from their friends and family at all.

Only if the employers are idiots. Good engineers are always scarce.