Oh come on. Sure, as I live in Middle East my rent might be 450$/month but after you consider that I'm paid 5$/hr, I'd gladly take 60k/yr (which is very low end) even if my rent and other expenses quintupled
It's all relative. I'm just saying that someone who's talented enough to get a job at Google could probably land a cushy remote gig and live somewhere dirt cheap, saving more money and enjoying a higher quality of life.
At Google, it is completely not out of the ordinary to make 300k a year as a senior, or 200k after 2-3 years with the company. To get a remote job making that is orders of magnitude more difficult.
Also, nobody wants to hire junior remote people, so if you go to MIT it's either 160k at Google or 40k remote. Maybe after 4 years at Google someone'll be willing to pay you 50% of what you make there, but you don't really want to move away after being in a place for 4 years to get a remote job and be completely depended on your employer.
I'm from Eastern Europe and I tried to get a remote job before emigrating. I applied to dozens of places and could only get an interview at one company that was paying about 25k because Eastern Europe is cheap anyway. Was rejected for lack of experience. Got a job in Western Europe for 4x more.
In addition, the are many many interesting things to work on at Google and smart people to learn from, whereas the few remote jobs that exist are mostly making CRUD is the web framework du jour.
Places that are dirt cheap usually are so for a reason: Hardly anyone wants to live there. If you're that talented, most likely you're going to want to congregate with others who are also quite talented. There's only a few places you can do that. Add in the other benefits of living in an urban area (variety of foods, cultural things going on, just more stuff to do), and there's a reason why they don't choose to do that.
Not saying that's everyone; there probably are some who are doing what you suggest. They're just not the majority.