It's not a net loss for startups - the ones past series B can easily price their options. The earlier stage ones will be cut out, that's true. To be honest, any effort to raise wages will cause that effect, and it's no reason to oppose better pay for engineers.

On the other hand, an immigrant, once settled, will accumulate wealth and eventually become a startup founder herself, without as much need for investment. That would be a boon for the earliest stage part of the ecosystem.