Imagine people getting paid google-in-Silicon-Valley dollars and living in actually-affordable-and-nice-to-live-in Nowhereville! We can't have that! Quick, find some way to keep 'm coming here!
WFH means a company doesn't need to provide as much office space, electricity, water, etc etc. It's a saving to the company and not even a small one. Trying to dock pay for it is incredibly backwards.
This really is all about control.
One company I interviewed with recently had a base pay for the (fully remote) job, but then depending on where you lived, applied some formula to it to adjust the base pay up or down depending on the cost of living of where you were living. Still kind of bullshit, but still seemed more fair than just docking pay for working from home.
Early on, I realized that the whole WFH phenomenon would let workers do some kind of salary arbitrage. It's exactly why I moved back to Texas. I get paid a DC-area salary (which is high compared to here), and moving to Texas saves me about $15,000/year in various state taxes. Plus, the cost of living for most everything is so much lower here. I'll end up with a lot more money in my pocket.
Right now, I'm supporting two apartments, and with the loss of those taxes, I'll still have slightly more money at the end of August than I'd have had if I stayed in VA and only had the one apartment.