A shack in SF is a million bucks precisely because Facebook won't pay a SF salary unless you are in SF. If they paid a SF salary no matter where you lived, then a shack in SF would not be worth one million dollars any more.
So you're saying that not only would it be better for the workers, but San Francisco would become more affordable to poorer people who don't have tech jobs and who were perhaps born there? Sounds like a win-win to me.