I am an immigrant who got a GC via the H1B route, so I'll give some perspective. I work at one big company, and have heard from those at FAANG.
It depends on how you define H1B abuse. Most of the H1-B abuse I'm aware of are either from small companies, or companies like Infosys, etc where they really exploit the whole system. Most of the major companies (Microsoft, FAANG, etc) do not have systematic abuse, beyond perhaps lowering everyone's wages as a result of hiring them. At least where I worked, people with H1B's did not get paid less than those who were citizens.
Now although there's no systematic abuse, individual instances exist where managers exploit this dynamic and tend to overwork people. In the teams I saw this, it was usually the manager doing it to everyone (H1B or citizen), but they were often biased in favor of hiring H1Bs. One particular (very senior) manager was recently fired for abusive behavior, and it likely was because he became senior enough that many of the people under him were not H1Bs, and were quite vocal in not putting up with his crap. So it does exist.
As another commenter said, FAANGs and similar companies are usually very good at helping you get a green card. My company, for example, has a policy that if they hire you for a H1B, they will start your green card process as soon as they can. You just have to perform your job till you get it (1-2 years if you're not Indian or Chinese and have a MS degree). Most other companies (including established big names) do not have such a policy - a lot of them say they want to try you out for a while to see if you're good enough before putting in the financial investment to apply for your green card. With lots of companies, you often have to pay for it yourself and keep a tab on the law firm to make sure they're doing things right - not so at FAANG.
For a lot of H1Bs, they have to consider the alternatives. Quite a few come from countries with little opportunities, and much worse abuse. I can say that for my case, and it is likely true for people from India, China and Korea.
The "pipeline" is also easy in the US. Come here for a MS degree, and get hired. For many other countries, it's not that easy. Some allow you to immigrate due to your advanced degree, but with no guarantee of work, so you need to have plenty of money saved while you look for work - something many cannot afford.
For all that we hear about racism in the US, the day to day experience (outside of work) is still a lot better in the US than in many European countries. A South Asian friend of mine moved from the US to Switzerland and not long after he moved someone planted a big anti-immigrant sign right on his door. He was also made to feel unwelcome in bars. I've heard similar stories in other European countries. The experiences aren't directly comparable - some things really are worse in the US, but it's not a clear ordering where other countries are better. The only one better places I can think of is Canada (albeit with a lot lower pay), and maybe Australia. Australia was definitely considered worse than the US (from an anti-immigrant stance) in the 90's, but most people I know who've moved in the last 15 years really like it.
So as bad as you think the US is, there aren't many good alternatives if your goal is to settle down. Either you get a good environment with no path to citizenship and/or low income, or you get a poor environment (locals very unfriendly), or both.
> FAANG hires them so that they can exploit them as cheap labor that can't risk leaving.
FAANG pays H1Bs more than almost all other companies pay senior American execs. I cannot call that exploitation.