Yes, and they exercise their leverage by applying to those SF or NYC companies from wherever they are. If they can exercise that leverage from anywhere, then how is that not having leverage?

These companies are used to this sort of thing. Relocation costs are nothing compared to the cost of hiring. There is effectively no friction on the company's part. Yes, the employee needs to be willing to go through the process of moving, but, provided they're willing to pay those costs, their leverage in the situation is unchanged.