I’m sure they’d find a reason to pass on anyone that does apply through those ads.

But then it is legally hazardous for them to hire the foreigner

That assumes anyone is actually checking up on this. Enforcement is virtually nonexistent.

Except the point of the original post is that has changed.

That's a systems question. We've had comments on HN before from people who post those ads because they're legally required to do so. The comment that I recall said (in my paraphrase):

- If you apply, you will not be hired, because we're only looking to hire the guy we already have in mind, who we're already working with under some other relationship.

- But, if you apply, that guy also won't be hired, because we proved to be able to fill the role locally.

- This annoys us and him and you.

From a systems perspective (and taking this description as accurate), if people make it their business to apply to those ads, it really will stop companies from using this method to get green cards for foreigners they'd like to employ. The downstream effects are open to question; maybe a given company will employ more domestic employees and maybe it will just keep using the same foreign contractors it's already using.