"Should" is a loaded word that I won't address, but commonly "work from home" is the term used when you're still located near the office, vs. "remote" which is where you're nowhere near an office.
It's not about being close to the office. For many teams it's about being in similar timezones. Companies hiring along the NA west coast for instance is pretty common and makes sense if you want people to collaborate closely.
Because that's been the sentiment. From the era it was popularized by Remote book (office not required), and then there's discussion around location adjusted salary (e.g. gitlab). As far as I know Basecamp still pays roughly same rates everywhere (location independent). Employer of Record like Deel.com or Remote.com exists for making global hire easier.
I don't think I actually answer "why should" .. but that's not what I say anyway.
Unfortunately, getting less and less true by the day. When I first used internet, it was truly global, anything someone else could access, I could as well.
Nowadays, I'm finding more and more geoblocks everywhere. Sometimes I cannot access a website because apparently "a lot of internet criminals are also from the country you are accessing our website from, so you're collateral damage".
The geoblock is just an indicator that it's becoming more and more global, with more users. Who are the bad actors here? The "copyright lobby", the "scammers", or is it the vendors making and selling these draconian fencing tools?
Blocking someone because of their geographical location would mean (to me) that it's becoming "more localized", not "more global". Before I could access websites everywhere, now I cannot.