This is the way restaurants do work, and has never been a "sin". What would be a sin is thinking that one can arbitrarily raise prices to cover arbitrary wage increases and still expect people to come to the restaurant. All that will do is put you out of business.
What is unfortunate is that politicians often force restaurants to raise wages, with the same general outcome. That said, minimum wage increases are far more destructive to unionized businesses, since union wages are often pegged as a multiple of the minimum wage. Most non-union businesses are unaffected by minimum wage levels, which is part of why it is union type jobs that are so commonly outsourced.
I don't care. They have no "right" to employ illegals to lower their wage rates. If they cannot charge an amount for their food that people are willing to pay to cover their wage costs, let them go out of business. if they argued that they needed slavery to stay in business, would you give it to them?