Yes, indeed the number of H-1Bs has dropped because employers are not filing nearly as many as they did during the Y2K period...its a reflection of the economy. Which tends to support the position that the H-1B visa is not abused by employers...when they needed the help they asked for foreign workers, now they don't. As for your contention that state labor departments have anything to do with an H-1B petition, you are once again completely wrong. Moreover, an H-1B petition has never taken years to process...more like six months at best.
Where are you getting your data from? In 2003 there were 56,986 approved in the first 3 quarters with 47,813 pending. For a grand total of 104,799. Not including some 84,000 that were exempt from the rules. All of this while people that are fully qualified can not even get an interview.
Ref: http://www.immigration.gov/graphics/publicaffairs/newsrels/H1BRelease8-26-03.pdf
For more data see:
http://www.zazona.com/shameh1b/Library/BrainSavers/VisaGlut.PDF and http://www.zazona.com/LCA-Data/
There is a check, it is called your state labor department. They can take years to process these things, and many do get denied, which would imply they do something other than rubber-stamp every application that comes in the door.
It is very hard to "prove" that a company "could not find" a qualified American candidate. You are dreaming if you think the government actually goes after companies for this practice.