You're not missing anything. Other than that, seemingly, STEM roles are the only industry where the laws of supply and demand do not apply, and a positive supply shock of something does not, for some reason, drive down the price.
If a supply shock doesn't drive down the price then it suggests that the supply constraint was larger than than the shock and that the market was being artificially constrained to prevent the prices from rising to meet demand.
It's also possible that the supply itself is what creates more demand. People who move to the US are probably less risk-averse than the average person, and more likely to start new companies, creating more jobs.
STEM roles already pay incredibly well in this country, and even more so if you compare it globally.
What is the downward price shock you're talking about? What do you think the salary would or should be, assuming all H1B worker are magically gone the next day?
Have you engaged with the Card vs Borjas literature at all? We learn about the world by studying it, not by simply thinking about it from one's armchair.
