Which, of course, they eventually did.
If anything, I take this email to be indicative of how companies can lose sight of the effect on their actual employees of market strategization. Jobs isn't worried about having to pay his team more here; he's worried that he's about to see the world's largest online advertiser launch a browser that could cut Apple's control of their users' online experience out from under them. If anything, I don't think they're really thinking about how much people need to get paid (which is, indeed, a problem).