yes, the point is people (assuming similar work quality) living on cheaper place can afford to undercut other people living in more expensive place. That's why remote position usually pay less, because you are now competing globally.
Which goes back to the point, the price is the price and not, the price is variable based on location. Either there simply isn't enough value for anyone to be based in SF, or it should be possible to present similar value whilst being based elsewhere.
The only way you can demand SF area salary by living in let say vietnam is if you can convince your employer that they won't be able to find anyone else in the world that can do your job as good as you.