A remote employer may not pay all the local taxes and contributions. In particular, in EU a part of the social security contributions is usually paid by the employer, not employee. The remote worker will benefit from the social security paid by others .
A remote employer will not necessarily respect obligations that local employers may have (e.g. the number of maternity leave days). It may give the remote employers an unfair competitive advantage wrt the local economy.
Everything about the scenario exactly mirrors tourism as far as I can see, and countries generally like rich tourists visiting.