No, it assumes that companies that make money will start more projects and require more people for those projects than companies that are not being successful.
Not necessarily, a company can make more money by replacing high-salary people with lower-salaried workers. In fact, that's what many companies have done. You're committing a false un-equivalency; you're saying that companies that make money are successful, when there are companies that make money that can be unsuccessful. The word you may be looking for is "profitable", but "profitable" is very different from "successful".
And no, no one is talking about the number of people being proportionate to the quality. They're saying that having higher quality engineers results in higher quality products. By allowing skilled workers in, you allow people to choose the best quality engineers, and produce something better.
But there's no proof that H1B workers are necessarily higher-quality than American workers. In fact, there are many comments in this very story that tell horror stories about the lack of qualifications of those H1Bs.
And this video shows that many companies aren't looking for high-quality from H1Bs, just lower cost.
The result is that more money is made, more other projects are started, and more people are hired.
Your vision above is very simplistic. If that were the case, high-quality engineers would guarantee the success of a project, when that's obviously not true.