Even with that, it seems arbitrary and unbalanced. One person's cost of living paying for a mortgage in the city, raising children, or having college debt is very different from another's renting a 2 bedroom with their partner in midwestern suburbs. You might say that it's not the company's duty to compensate you for the financial impact of the life choices you make, yet they're doing exactly that by adjusting compensation based on the broad geographical area one chooses to work from.
I guess for our situation, the folks on the east coast have the worse deal as their rents/mortgages are higher than remote workers' in other states, but the pay is also competitive for that area so there are still people choosing to be local. On the other hand, if my pay was lower I'd just find work with an NYC or SF based company that is remote or happens to have an office in my metro as they tend to pay higher salaries.