Absolutely. There are many parts of the USA/Canada that have enough population density and local universities to have a decent talent pool but aren't SF or NYC.
I'm a big urbanist so my immediate thought is smaller post-industrial cities with lots of cheap building stock and old universities around like Buffalo and Pittsburgh, but you could do the same thing in well-gridded suburban sprawl areas, as long as they haven't hit full-bore gridlock yet (Boston or Toronto suburbs are right out).
This is especially egregious in the tech industry. Profitable tech companies can afford to pay more than even Bay Area wages to their tech employees. The most profitable ones (e.g. Google) could bump their engineers' already relatively greater salaries by 10-20% and still be very profitable (six-figures, net profit, per employee).
People writing software in "lower cost" areas for "lower cost of living salaries" are being taken advantage of even more than Bay Area workers. Paying a good software engineer less than a Bay Area wage ought to be viewed as insulting at best, regardless of where they live.
