The current gaming of H1 is pretty damaging. TCS, Cognizant are not employing any exceptional talent. Even in India, exceptional talent does not want to work for Outsourcing mega-corps for more than few years, just to break into the field of software. I have seen case after of case, of people getting offers from Microsoft, facebook etc. could not get H1. I have seen case after case of students from Ivy League or highly reputable universities lose out H1-Bs to some guys who can barely finish a cohesive sentence. I am seeing lot of students who are applying for community colleges after a Masters degree, just to hang in US for one more year to get another shot again at H1.
Moreover, an internal report in the National Science Foundation, a key government agency, actually advocated the use of the H-1B program as a means of holding down PhD salaries, by flooding the job market with foreign students. The NSF added that the stagnation of salaries would push domestic students away from PhD study, which is exactly what has happened. Former Fed chair Alan Greenspan has also explicitly advocated the use of H-1B to hold down tech salaries. [ source : http://heather.cs.ucdavis.edu/h1b10min.html ]
I don't have links to back it up, but I read just about every issue and I've never seen this viewpoint advocated in its print magazine.
Given the opinionated writing style, this is almost certainly a less-edited (or non-edited) "blogs" section in the same vein as the wild west that is blogs.forbes.com.
I haven't read the Economist in years but advocating something that would drive down wages is pretty much of a piece with its worldview. It's just surprising, perhaps, because usually these conversations focus on unskilled labor.
H1-B cannot be repaired, it has to be replaced.