You're making an assumption, though--that people who want to come here on H-1B visas *want* to become American citizens. I imagine some do, but many (most?) don't.
I'm actually surprised this came back up again. With offshoring being the Next Big Thing, and with the communication infrastructure being what it is worldwide nowadays, Prakesh and Shilpa can do much of the work from Bangalore and Hyderabad. You don't always need to go through the immense expense and pain of the paperwork jungle to get them the visa and bring them Stateside anymore. And for the roles that DO have to have a warm body sitting in a chair in the US, I'd rather see that chair filled with somebody who was already here and looking for the job, if they can do it.
The problem is that the H-1B is solid in theory--the supposed safeguards that a job "has" to be offered to Americans first and that it has to pay the same regardless of who's filling it. But we both know that's not how reality works. Companies collude with the body shops to write the job requirements in precise, sneaky ways so that ONLY the chosen visaholder can fill it--I used to read my old employer's H-1B postings and marvel at the esoteric, precise skillsets they required when I knew damn good and well that half those skills wouldn't be needed. They were there to keep out-of-work local programmers in South Carolina from getting the job. Then they'd set the job position three pay grades lower than anybody else in the company, so (for example) a SQL programmer that would've logically been a pay grade 14 "lead" position (as mine was on the mainframe side) was advertised as a grade 11 "junior" position that paid $25k less.
Your idea works if you're wanting to attract the best and the brightest from overseas *if* they actually do want to stay here, contribute, and assimilate. But I can't see business interests ever giving up that bondservant feel to the H-1B. And meanwhile, there's a growing pool of domestic homegrown IT and engineering talent that's working at Home Depot because Ashok is either sitting at their desk or doing their job from twelve timezones away.
}:-)4
I really don't care if they want to come here for citizenship or not. But, I do care that I want to encourage that citizenship path in the rules of the H1B visa.
If I am going to encourage an H1B type of visa, I am going to do so because I not only want to make it possible for the employer to have that kind of talent working here, I want to encourage that person to stay here.
And I want that person's job freedom to make it difficult for the employer here to exploit him and prefer him because he thinks he can pay less.
If the H1B visa holder can take himself to any employer here, he will not be competing based on any salary advantage over people already here. Eliminate the employer's hold on him and you eliminate most of his ability to unfairly displace a qualified person already here.
If that person's talents are so useful to that employer, they are also useful to the nation and I want to encourage retaining that talent; and not encourage the idea that the need for that talent is no more than temporary, because, in fact, it almost never is.