I agree with some of this - particularly your first paragraph - but in other parts you overstate the virtues of an unregulated market for wages. This is the biggest one I think:
After all, it is not the CEO's who own corporations, but the shareholders. As such, it is the shareholders who ultimately decide upon the pay of the CEO. If the owners of a company decide that it is in the company's best interest to entice the top executives with $x, there is absolutely nothing wrong with that.
This puts a very rosy tint on the situation. With very few exceptions, shareholders do not decide executive compensation - either the board, or an "independent" panel, does that. The compensation package might be voted on by shareholders, but that vote is normally advisory only. The vote regularly fails, but the pay packet is normally still awarded despite the owners of the company not approving of it.
Yes, in theory the shareholders could assert their authority by firing the board and replacing them. But if they did that the value of the company would plummet, which makes it a very unattractive way to hold the board to account.
I remember an article last year in the Economist looking at CEO compensation; the conclusion was that (i) CEO pay was not correlated with company performance, and (ii) failure of a company that you lead did not lead to lower compensation at the next company - even if it happened repeatedly - as long as you got out before it actually went insolvent.
I agree that a strict limit does not seem appropriate - but it's worth remembering, when considering possible changes, that the situation we have now leaves a lot to be desired. I would like to see, for example, more transparency over compensation (including bonuses and similar); more power for shareholders to rein in pay; and high pay being tied to longer-term future performance.