Seems like a very good plan. The equipment isn't lost if the employee suddenly leaves and if he/she stays it's really not that big of an investment. Whatever makes them happy and efficient. On top of that it's a pretty decent "lock in" move in an age where good developers are somewhat hard to find.

From anecdotal evidence there are a lot of developers who satisfice when it comes to salary/benefits. There's a certain base level (that they consider "fair pay") and once they get that it's not as simple as adding another 20k/year. Additionally, other factors are way more important (no unnecessary hoops, being happy at work, meaningful/interesting work to do). I've had very heated debates over this but I firmly believe that in "brain activities" specifically, just tossing more money at someone is not exactly the optimal HR strategy.