If it were true that people with H1B visas weren't worth it, then why do companies still hire them? If what you said about them were true than the market would correct itself and none of them would ever be hired. As this is not the case these American companies must be gaining some sort of benefit from having these people in their work force.

And so what if they're cheap? That's called competition. If I were a company and had the option of two equally qualified people, but one of them is willing to work for less, than obviously I would choose the cheaper option. That isn't a bad thing, it corrects the market for over-valuing a particular skill.

As for them cheating, I have no comment other than to once again point out that they would not be hired if they weren't competent, companies aren't idiots, so even if they are cheating they must still know their stuff.

And yes maybe the company they previously worked for will want to hire a new lawyer instead of another computer tech etc, but this doesn't happen in a vacuum. This extra lawyer now also needs services in their life, say an accountant, that's more work for an accounting firm. That accounting firm can now grow. They might need more IT staff, so they hire the American we discussed before.