I'm not sure I can agree with your characterization of this transaction. It sounds like you're holding the use of a specialized work visa to replace US citizens who work for a partially state supported institution as equivalent to a decision not to transfer wealth from the state to these individuals. I'm trying hard not to mischaracterize your statement, I hope that is fair.

The LATimes article does, I think, focus on the strongest objection to the H1B visa - the workers are not free and full members of the workforce, with the right to quit their jobs and pursue new opportunities (in this field or another) in the US. Their employment conditions are highly coercive. Here's the relevant quote:

"The workers they import often live here barracks-style and are at the beck and call of supervisors who can revoke their residency at will. Eventually they return home to continue their assignments, without workplace benefits and at wages a fraction of what their American counterparts were paid. "

Personally, I like free labor markets. I am free to pursue my path in life, I am not entitled to fulfillment. If I want to try to make a living as a songwriter, or open a sandwich shop, or become a registered nurse, or go to law school, or, yes, work as a developer for UCSF, I am free to pursue all those things. Nobody owes me success. The same goes for employers. They are free to try to hire, but they are not entitled to a workforce on their own terms. If the workers say no thanks, I'll do something else, that's the market's answer.

A workforce shortage is (almost always) the market's answer. It isn't a market failure, it's the proper functioning of a market. Employers need to accept that if they aren't offering salary, working conditions, opportunity for growth, and so forth that is competitive with what other options talented people have, they aren't going to be doing much hiring. They need to sweeten the deal, or accept that they have not competed properly. They are not entitled to workers, any more than workers are entitled to jobs.

It turns out that people with the freedom I described, both those born here and those who immigrated under conditions that don't restrict their personal freedom, won't work these jobs under the terms UCSF has decided they should accept. As a result, UCSF has turned to a highly coercive visa program that violates fundamental notions of basic human freedom - the right to pursue your career according to your own personal choice. No, again, there is no entitlement here, nobody has a right to a good outcome, just the freedom to pursue it.

The great appeal of this visa is that it creates a huge population of workers who lack this freedom. This is why corporations like it so much. Truth is, they don't like personal freedom, they like power over their workers' lives. This gives it to them, in spades.

Personally, I think we transferred wealth to UCSF here, by creating a visa that essentially allows them to bestow the value of live/work rights on developers, with the power to revoke those rights. That power - the ability to control your right to live an work in the US - has great value, and corporations capture that value by paying people who don't have mobility rights well below their market value.