The mis-use of the title "engineer" is insulting to those in that profession that earned that title. All I see are a bunch of computer programmers or computer scientists. No engineers here.
I also work as a software engineer. My title is not "computer programmer" (although I certainly program), professional programmers (e.g., "programmer/analyst" in an IT organization of a bank) typically encode domain-specific business requirements (e.g., "if the job code is 0123 add $0.75 to hourly rate") into internal applications. There's nothing wrong with that, it's a vital role and will soon be a part of most any white collar job.
I'm not a scientist. I don't build mathematical models and validate them experimentally (typically via simulation): it's an important and difficult job, but it's not what I do.
I build software systems by applying mathematical models to solve technical challenges. This is a lot closer to engineering than it is to science or programming in the traditional sense of the word. Of course, I also don't care: you could call me a "a computer janitor" and I would still love what I do.
Looking at the past experience of the team, and how many positions they've held with "software engineer" in the title, I'd say it's an insult to try to insinuate that they somehow aren't as capable at what they're doing as one with a degree that says they're an engineer.
Come on, let's be nice.
It's essentially a job requirement if you want to get into some types of engineering fields (electrical, mechanical, civil, etc.)
In the computer field, there's an extra step: Computer Scientist -> Software/Hardware Engineer -> Application Developer -> End User. The boundary b/t Engineer and Developer is sometimes vague, though.
TLDR - calling someone building an entire startup from scratch and 'Engineer' is perfectly accurate, since the level of software and hardware customization required will ensure they're doing alot more than just developing apps.
PS - not to belittle anyone's career, I fit squarely in the Developer category myself. As mentioned above, all are necessary pieces of the puzzle.