This is no different than living in a city, going to work in person and renting cheapest, crappiest place of residence you can. You could say "There is always someone willing to tolerate shittier living conditions and undercut you" if your pay was based on your cost of living. But it's not. Your pay is based on the supply vs demand for the type of work you do. If it so happens the work you do is worth enough to support you living in a large city(and your sales skills good enough to take advantage of it) great. There is plenty of people who work in person and can't afford more than a room in a bedsit in a city. Imagine how much better their life can be if they can do their work remotely and they can rent a house "in the hicks" for the same money.

There will always be people willing to do your job for cheaper as well as these that take 3x what you take and do half. Such is life.