Both of those factors are Amazon's choice. I really don't see how Amazon would be any more "screwed" by not getting H1-B employees they won't pay a competitive

Both of those factors are Amazon's choice. I really don't see how Amazon would be any more "screwed" by not getting H1-B employees they won't pay a competitive salary to than they are in not getting US citizens they won't pay a competitive salary to. In fact, if they find the prices too high, they could always hire locals! They could also expand their presence in their SF office, if somehow an area costing a lot to live in would become an advantage. Unless there's an assumption that Amazon has some sort of unalienable right to hire foreign workers at less than local market rates, there really isn't anything unfair about it.