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You’re assuming that the best people would be pushed away and not the worst people. The “best” people are compensated well, treated well, given flexibility & and upwards path. Working remotely is not the only consideration for the “best” people, but it may be for the “worst” people.
Do they lose the best people, or just the people who are work from home dead-enders? I'm sure some of the performers don't mind going back to the office, but you're definitely taking a gamble that they will just cut and run and go somewhere that gives them the flexibility to work when and how they want.
I think it's effective insofar as it pushes voluntary exits. But yeah like you said, that means losing great people. I think it's a lot about control too, not just payroll.
This is happening at a lot of companies. I think it’s that priority of work > life and wanting employees to demonstrate that.