Every dev interview process I've been a part of has not included consideration of the applicant's citizenship status. The interview process has many flaws, but it is not contrived to tailor itself towards H1Bs at the expense of citizens. At least, not at the companies I've worked at, which are household names. At TCL or Wipro? Sure, those are blatant offenders of the H1B visa.
You said it yourself, those offenders supply talent to other companies. Many roles simply won’t be available to citizens because they’re filled by H1B abusers.
Yeah, I think the abusive companies like TCS and Wipro should be shut down. But the other companies generally pay pretty fair and use this visa system pretty normally, and they do see a shortage of qualified talent. I saw it myself as an interviewer. TCS and Wipro have a completely different quality standard (if you can call it that) and everyone knows it, plus they are cheating
Companies don't need to favor one group against another, they just need to make the process artificially hard, so they'll have the excuse that there are not enough workers ready to fill those positions.
The process is not artificially hard, imo. It's just testing you on things a college CS curriculum goes over. Sadly many many colleges in the US have a very substandard bar for teaching this subject.