Honestly, a lot fewer American teenagers want/are allowed summer jobs these days. They are all focused on doing enrichment activities that will look good on a college application, and low-wage menial jobs don't count for that.
I actually think it's a great thing to let young people from around the world have working holidays in America https://www.usit.ie/experiences/working-holidays/j1-usa/
I work in the public school system and I can definitely assure you that nowhere near “all” high school students are doing what you suppose they are doing.
Sure, but the ones who might plausibly end up junior SWEs at Microsoft are.
Yes, perhaps now that they don't need to compete against all of India, they might actually have a chance at that.