Do engineers just need interesting technical problems to remain happy? If the engineers were motivated by big financial incentives, would they get them?
The point wasn't that you don't have to pay engineers well -- just that technical challenges are a good way to inspire the right people. (Business people might be inspired by the chance to make big deals, but not so much by the chance to make difficult deals).
It's also harder to measure the positive financial effects of smart engineering. If somebody saves a million dollars worth of hardware through some clever optimization, that's easy to calculate; if they reduce the time it takes to display a photo by 10%, that's important, but harder to calculate.
I landed a programming gig working on robotics projects, and working on interesting problems makes up for a world of sins :)