I think it's because the founders were engineers, but more than that, engineers who actually worked for someone else first and also had another company before Netflix. So unlike say Facebook or Microsoft, the company culture was created by someone who has actually been an employee before.

Also unlike a lot of the other tech companies, the salaries of the engineers aren't their biggest cost -- content is. So they don't take as big a hit on their stock price or profitability when their engineering costs go up because they are dwarfed by content costs.

And lastly because they believe that overpaying for talent makes sense in the long run because then a lot of the best talent wants to work there, so they can get paid a lot and be surrounded by other people who like a culture where poor performance is rewarded with a big severance.

I won't lie, the culture isn't for everyone. I personally enjoyed the pressure of having to constantly perform, I felt it made me do better work, but not everyone is like that.