I'm not arguing against decreasing equity as a startup matures, though. I'm saying that equity decreases at a much faster rate (by an order of magnitude, sometimes two) than the risk. Again, the common real-world example (in SF) of founders having 50-80x versus Employee #1, in the case when there's zero code and zero product, just a napkin sketch and founders who convinced investors of a vision (which will anyway change once development starts). Or employee #8 who is an order of magnitude lower than emp #1, when the product hasn't launched yet.
It is my opinion that one reason people sign up for such low equity, is because they lack information about how equity is divided overall. Employee #1 is OK with 1% because he mistakenly believes that investors hold 40%, founders have 10%, and the option pool is the remaining 49% -- when really the option pool was 8% total until the next round of funding, and the lion's share overall sits with the founders.