As I understand the reasoning behind the H1B visa program:

If it's just cheaper, then it's not ok, essentially because workers in Montana should be protected from wage competition. But if it's unlikely that someone in Montana could / wants to do the job, then it's ok, because then there is no competitive situation and the interest of the business / economy to fill a position takes precedence.

Isn't a good way to ensure that to just raise the bar in terms of wage? If a business has to pay $150k/y for a H1B worker (because otherwise they won't get the visa) then they'd probably prefer a comparable candidate from Montana for $140k/y. If they still hire the H1B it's because nobody in Montana wants to / can do the job for $140k/y, so no wage competition (except of course if someone in Montana does want to do the job for $160k/y - but in that case they're perhaps not in desperate need of "protectionistic intervention" from their government).

So to me it seems an "auction" allocation strategy for H1B visas would strike a pretty good balance, raising the wage bar when demand for visas go up (and lowering it if/when demand goes down).