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For companies hiring H1Bs it's about being closer to clients and colleagues and just being managerially far easier than opening an offshore office, but the benefit isn't infinite and once companies have the chops for opening new offices they'll turn down the H1B hiring.
The issue for the US is that, are you're saying, "having faith in your own country" only works if you have the process for developing unnaturally skillfull talent, which is just not going to happen once the smart people stop moving to the US as countries have uniformly distributed talent potential.
So how did America become a world power before H1B? The U.S. was the world’s largest industrial power by the early 20th century with almost zero skilled immigration. We had restrictionist immigration policies from 1921-1965 and skilled immigration after that was a trickle until the 1990s. Apart from one-off events like German scientists after World War II, immigration was heavily skewed towards poor but hard workers.