Putting an end to the debate about whether people that enter the U.S. through the Visa Waiver program and ESTA are considered to be “inspected,” USCIS’ headquarters has issued a statement that people who enter with a visa waiver are considered inspected and admitted for adjustment of status purposes.
The statement from USCIS HQ states that USCIS itself has the jurisdiction to adjudicate any adjustment of status (i.e. green card) application filed by applicants who enter through the VWP. Of course who retains jurisdiction will change if the applicant is placed in removal / deportation proceedings for overstaying their visa.
USCIS also indicated that it intends to make a statement in the near future about this issue.