> The thing I don't understand - why would someone 'never selling' influence someone else to work for less than market rate?

sour-grapes. They see the equity payout, and imagined that they'd get a piece of it had they been compensated with equity.

What they don't see is the loss if the company went bust - like most startups do - because hindsight is 20/20

so realistically, it makes little difference if a company paid in equity or cash - as long as you calculate the discount for the equity compensation appropriately.