It's the entire world that; lives in a timezone the employer is comfortable with, speaks English with near native proficiency, comes from or can adapt to a culture that is close enough to the employer's culture to fit in, has access to a reliable electrical grid, and has reliably fast internet access.
Basically If you're already in America, you have several huge advantages over the rest of the world when applying for remote work (permanent or contract).
While I see your point, the job pool for a remote candidate, realistically, is the couple dozen jobs a month that they find on HN/Linkedin/StackOverflow Jobs/etc. Also, the on-site candidate pool, realistically, is a subset of the remote candidate pool* (edited). I don't know anyone who wouldn't prefer to work from home (or wherever).
I know plenty of people who wouldn't prefer to work from home. I have the option to do so regularly, but I only take it when it suits me for other reasons (someone coming to visit normally) I prefer to keep my work and home life separate if possible.
It takes a certain type to WFH and there are plenty of downsides. I'm currently remote but I wouldn't say I prefer it to on site. It's almost certainly exaggeration to say everybody prefers it. There are ups and downs.
Sure, and also everyone tends to go for the SF positions, as they pay better. I was just mentioning one theoretical way that remote working might be less competitive than on-site.
Basically If you're already in America, you have several huge advantages over the rest of the world when applying for remote work (permanent or contract).