Unless you believe that engineers in Paris are a quarter as productive as engineers in San Francisco, you already acknowledge that geographically defined labor markets vary dramatically in compensation. If you remove those borders, why would you believe the rate for labor would settle on the high value instead of the low value.

That's a very superficial analysis. These engineers are not native to Mountain View, usually not even native to California, and sometimes not native to the US.

Several of the highly productive engineers born and raised in Paris moved to Mountain View, because their in-demand skills allowed them to get a high paying job.

Their worth is not set by the Mountain View office - they were moved there because of their worth.

If you remove those borders, you still have the same highly skilled engineers in demand, the only difference is that a company doesn't need to pay for their visa and relocation anymore.

I've paid 4x many times for steaks that were worse than a chain like Longhorn.

I'd go so far as to say price rarely reflects worth. Prices perverted by all manner of different "invisible hands" is more the norm than the exception.