This is obviously counter to the prevailing thought flow here, and I'm more than willing to admin that companies can exploit both H1B Visas AND the employees hired under it, but I've never seen /.ers discuss much about how it would affect overall competitiveness of American companies if they could not hire cheap labour from developing countries and bring them in. Some points I see, qualitatively are:
1) Companies in developing world will have a huge cost advantage in IT, and the more significant IT costs are to an industry/company the more significant this advantage/disadvantage will become.
2) Knowledge is generally free of country barriers, and I think most people here would want it that way, which means it is foreseeable that IT products & companies can develop in developing countries at a much lower cost and export it cheaper compared to the same product made say in developed countries. H1B to some extend mitigates this risk in developed countries, and also pulls out the better talent from the developing countries inhibiting , also to some extend, actual product/mature IT product companies growth in these companies. I'm talking about something like having an MS or GGL in US with H1B talent being more competitive to a potential Indian MS or GGL - you dont really hear about (yet) an Indian company with a fully developed OS or IT Product as much as its industry size suggests.
I'm sure there are counter points that would likely mitigate against these risks, but I think these points could have a real , if not absolute impact to the industry as well, and in that sense, H1B might be doing good for the developed countries ( since we're talking about H1B, I suppose I should just come out and say the US..)