Correct me if I'm worng but my understanding is that the J1 is an "exchange student" visa made popular by '80s teen movies. These are not really appropriate visas for people intending to make a permanent career in the US. Of course you can apply for a waiver but then you must recognize you are asking to be judged exceptional among all the other exceptional foreigners.
And all this sour grapes talk about how the US is suffering from losing yet another overeducated life scientist is getting a little tiresome. To the married poster - if Europe is able and willing to foot the bill for your research then all of mankind will benefit from it in due time, right? Why the anger then? I'm not even able to afford to visit Europe these days.
As far as the original post, it seems to me UCSF could have made a better legal effort to get this guy naturalized but they decided it was enough to just have him telecommute.

I have just arrived in the US to take up a post-doctoral position and have been astounded by the legal red-tape involved in working here on a J1 visa - had I known, i probably would have thought twice about it. After reading this article Im now a little worried about returning home to the UK for family events this year! I understand the US's increase in security but surely it should be easier than this for those invited to work here.

Indeed, I have experienced a similar situation. However, in my case, I am married to a clinical psychologist (California licensed), who obtained her PsyD while spending 10 years in the USA. Originally arriving on a J-1, she was required to return to Ukraine to fulfill her "2 year home residency requirement" once her training was completed. We are still in Ukraine.

The US government, in their infinite wisdom, rejected her waiver request (in order for her to remain in the USA, where she helps (oops, correction -- HELPED) the homeless in San Francisco), in spite of the fact that the Ukrainian Government officially agreed to let her stay in the USA. This is generally considered the hurdle that must be overcome -- but not this time. USA immigration is the high hurdle.

Moreover, I am a highly-trained neuroscientist (PhD with 7 years postdoctoral experience); born, raised, and trained primarily in California. Because I love my wife significantly more (needless to say) than the shortsighted and floundering American Government, the abhorrent U.S. judicial system, and the outdated set of naive, paper-pushing, blood-sucking immigration laws, I left the USA with my wife. Thus, in my situation, the brain-drain was a 2-for-1 sale. Good job USA, good job.

I'm so perturbed by how the US Government has been operating in the last few years, I'm not sure that we'll return. Returning was the original intent, but that sentiment is changing for both my wife and I. Hell, if we start earning Euros, we could do a lot better (monetarily) living in Europe. Plus, we could develop our budding careers in the highly prosperous and growing European Union, instead of the "good ol' USA." Oh yeah... we can use real stem cells over here, too!!!

Lastly, I find it ridiculous that we have been "punished" for abiding by the law. We filed paperwork when we had to, we paid all of the outrageous fees to the government AND lawyers as we were required, and waited for the rejection letters to arrive. So, we left the country when we were supposed to as well. Shockingly, we know, first hand, another couple that arrived to the USA on the same visa and in the same program. They decided to remain in the USA ILLEGALLY for over 6 years. They applied and were granted the waiver of the 2-year home residency requirement imposed by the USA. Where's the justice? Where's the consistency? Where's the LAW and ORDER??? It's totally absurd...

Over the last couple of years I have been offered 3 jobs in small biotech companies in the US. I was very keen to take up these offers and the companies were looking to employ someone with my unique skills set. However, on one occasion H1B visas ran out on the day i was offered the job, then i applied the next year to be rejected by the random selection procedure i eventually decided it was not worth the stress and decided not to bother again. I have now taken up a position at a biotech in the UK and will probably never try and work in the US again.
I have a PhD and have worked productively in a world leading respiratory research institute. I feel that the US needs a visa system which takes into account the quality of the applicant and their ability to fill vital skills shortages in the labour market. The random selection proceedure could reject a highly skilled applicant over an applicant with very limited skills.