What SV is doing is perpetuating US dominance in software (and some hardware development fields). If most of the skilled software engineers in the world become off-limits to SV companies, then the global software industry will cease to be so heavily concentrated in SV.
It's strange and amusing to see people earning hundreds of thousands of dollars a year complaining about foreigners undercutting their salaries. They imagine that if immigration is restricted, then the open jobs will go to Americans. The reality is that the jobs will leave. Aesop must have written a fable about this sort of situation.
But it's not as if China and India are in control of this process. Unless they're going to take the drastic step of preventing young people from leaving, it's not up to them to say how many students go to the US. They do increasingly try to get students to return, and any increase in xenophobia or restrictions on immigration in the US will make that easier.
> students who are likely to take the knowledge gained (at institutions built in part through decades of public funding) back to their home countries (understandably).
Or, if they're allowed to, remain in the US and contribute to its continued technological and scientific dominance. Even if they eventually leave the US, they don't just soak up knowledge while they're in the US. Most actual research is done by graduate students, for relatively meager pay. The US has a continual influx of extremely smart people who are willing to work relatively cheaply to keep American research institutions at the forefront of scientific research. How is this a bad deal for the United States?