There's a lot of nuance in these types of stories. First, the US is far from uniform in salaries. Salaries in large metro areas are different from smaller areas and are different from CA/SV. Europe also isn't uniform, and in Western Europe if a company doesn't move to all contractors they will pay significantly more into a countries equivalent to social security. Personally, I would be uncomfortable having my entire development staff be contractors as their interests are not exactly aligned with mine.

Amazing talent may end up cheaper in certain locales for a period of time, but if they are amazing they will become more expensive.

IMO, what's at risk are the entry/mid FAANG type jobs that pay a lot for what they are.