Opening new offices overseas is obviously not feasible in all cases and scalable.
And I don't think companies like Linkedin, Facebook, Google etc abuse the H1-B system. People there are genuinely smart.
However, there are certain consulting companies like Accenture, Infosys, TCS, Cognizant, various body shops etc that abuse the shit out of it. The govt. should definitely be more proactive in banning these companies and not play to the likes of NASSCOM. Infact, I'd argue that the govt. should come up with a whitelist of companies to grant H1-Bs to.