I could think of a few ways that this makes total sense.
$50 is $400 in an 8 hour day. There are places where $1000-1500 covers you for the month, even with non-local, white guy pricing.
My hourly comes out to "only" $20/hr more, but my apartment alone is likely a few hundred more than this guy's entire monthly expense profile.
He's going to get consistent work at this price point, so he won't have to hustle for contacts. That's more time billed or spent on the beach.
Stepping away from the economics and getting into comparison to Google/FB engineers, there are tons of people that could outproduce many Google engineers in a startup setting. They just aren't good at Leetcode problems or never took a shot at FB/Google. A lot of stuff just works as an engineer at Google that you don't get for free elsewhere. They're good at leveraging the output of some truly amazing engineers across their org. They're also generally overstaffed.