Also, loved the letter, it's great.
And all the recruiters I've dealt with are paid a flat fee by the hiring company, they don't take a percentage of pay. Then again I've never worked directly for a recruiting agency, either.
If someone has been getting offers and interviews for $60k positions and a recruiter can get them an $80k position, what does it matter to the developer if the recruiter gets $20, $40 or even $80k on top of that? I think with the right incentives recruiting can help everyone involved. The problem is when the incentives aren't aligned. If a company is giving Recruiter A $100k to find a developer no matter what, A's incentive is to push the developer's salary as low as possible. If Recruiter B gets a lump sum of 50% of the first year salary, B is going to fight for an extra few thousand dollars on my bottom line.
I'm on the opposite side of the country so it's very possible the recruiters in the Valley are leeches like they appear to be based on the general consensus on HN. My experience with them has been varied, from the former classmate with a degree in Fine Art suddenly trying to learn the difference between Java and JavaScript to someone who actually knows what they're talking about.
Here in Spain there are a lot of companies (known among engineers as "cárnicas", meat factories) that recruit people as own employees when they see an opening for contract work in a company, ship them directly to the contracting company for short terms proyects, and dumping them uncereimoniously when the contract ends.
They pocket a generous hourly rate, paying the contractor a standard rate monthly salary.
A large part of job offers publicly available here are of this kind...
I don't feel particularly screwed because I'm going to be getting raises over time, especially if I decide to hop out of my first job at year 3 or 4.
55-60k really isn't a bad place to be in many locations. I can't imagine it in some of the traditional startup places like the SF Bay area, Boston, or Seattle area though.