It is (usually) an exploitative relationship, most just don't know it. The fact that this arrangement is the norm speaks only of the power differential and nothing of fairness. Could you imagine what would happen to management if employees got a fair share of the work they produced.. for that matter, how much of Don's profits came from his hand and how much from the advertisers and how much from Disney's distribution network? Why are advertisers paid so much and box packers paid so little?
The fact that so many of us accept this system is because we don't have the power to demand profits (or we don't know any better) and we need to eat. We just tell ourselves that we prefer to earn a little less so we don't have to worry about risk. It makes it easier to sleep at night.
At my last job, I got to choose the balance between salary and equity I wanted -- and I really had to calculate if I wanted to earn a little less (or a lot less) in exchange for a greater share of future profits. Or to earn a little more (or a lot more) in exchange for giving that up. And having gained quite a bit of knowledge from the investor side of things, at least here in the tech industry in NYC, I don't think it's accurate at all to say it's "usually an exploitative relationship". At least, as long as employees bother to figure out how it all works.
Of course your employer can sack you or withold a raise. But of course you can leave for another company, or tell them you're leaving if they don't give you a raise.
But you've got to have enough skill to be of value, and enough negotiating skill not to be taken advantage of, as well. Just like a company has to have enough skill not to hire not to be taken advantage of by its employees -- the employees who don't contribute, the employees who spend more time playing politics, etc.
Most employee's do not know, nor know how to find out, their net worth to the company. They definitely do not get offered equity.
Most companies go to some lengths to obfuscate the earnings from their employees and contractually forbid their employees from speaking about their own earnings. Most employees, even if armed with such knowledge, do not have the power to demand their worth as there are a large queue of eager replacements for their position.
My point was essentially, if someone thinks they are trading off rewards / equity / ip royalties etc for job security, they probably do not have a good understanding of their relationship or value to their employer.
Don seems to have known full well what he was trading off, and as he explained when he drew the line and exercised his right to negotiate "they simply refused to actually ask permission". They refused to negotiate as they were so used to being in a position of power.
"But you've got to have enough skill to be of value" I would say, you have to have enough skill to be of 'great' value.. then you have the power to negotiate or go elsewhere. If you do.. more power to you!
Many software developers around these parts (myself included) want equity in the companies we work for. Equity is just our industry's form of royalties. Make awesome software that people love? Greater valuation of your equity!
This doesn't mean that Disney should or should not follow that practice.
Is your name used to promote work?
Do you have to go on promotional tours to show your face / drum up sales?
Is your work unique, no it's not. You can easily be replaced. You have a skill. Artist has talent and popularity. They could find another artist. Not easily and not with the fame and following and thus profitability of existing artist.