The undergrads at my university were mostly US-born. I believe that's the case most places, even elite universities. The more expensive universities are incentivized to take more international students for the money though -- and obviously there's enough wealthy people globally to fill whatever slots they offer. There are plenty of good engineers from the US who simply weren't lucky enough to be born to rich parents in CA. It turns out moving 2000 miles from home for a worse quality of life isn't super attractive to people born in the US when your whole family still lives in the same region. Of course, if you're born in India or China, the value proposition is a bit different.

Perhaps geographic restrictions on H-1Bs would spread the wealth: force these companies to prove they can't find engineers in the US by looking outside the wealthiest enclaves in the country, where even FAANG engineers complain about cost of living. We'd ease the Bay Area housing crisis, lift up other regions of the country, and provide more domestic-born citizens a path to good jobs while maintaining their own communities.