Because they did the same work?
>who is anyone to say that's not allowed?
I didn't say it's not allowed. I think it's poor business practice, and poor for society, incentivizing devs to stay in expensive areas instead of moving out to cheaper remote areas.
>If you forced them to be paid the same then one of them will not be working for you even if they want to; either because you can't afford to hire them both or the bay area engineer can't live on the salary.
That is speculation and I speculate you are wrong.
It's also not a company's job to incentivize where it's employees live.
I understand where you're coming from but there's nothing inherently wrong with paying different wages for the same work if it's a consensual agreement. If one worker is satisfied with his salary, and is being paid well for his area, the only reason to complain about a worker in a costlier area being paid more is envy/jealousy.