Let's say your value to most employers is $100k---this is the amount of money you make for them balanced against the amount you want in order to work for them.

Then the Goog enters the picture and is willing to add another $200k premium to that, in order to prevent you from working for that employer. This isn't sustainable; you're still you and your direct value to Goog is only $100k. The additional amount represents how much damaging a competitor is worth to Goog. As soon as the competitor goes out of business or Goog stops having piles of cash laying around to fight with other companies, that additional value evaporates.

If you decide to leave Goog, you should probably not expect to get $300k or more. In fact you may get less than $100k, if Goog has eliminated the competitors to whom you are valuable.

"Market rate" is extremely unstable.

This. You can't define a market rate as being lower then a bunch of other employers are willing to pay. Your market rate is what people will pay you. I see this all the time with saying FANG pays above market rate. Now if we're saying "average" market rate, sure there is an average market rate for a larger group of developers that they pay above, but then you need to do a good job of talking about what other companies are paying relative to average or median, not just say one is above market rate because it is above what many smaller companies will pay

You can view this issue from another standpoint.

Imagine some market where 10 companies sell bread and it costs $5. And lets assume that the costs are $4 and $1 is profit.

Then comes a company that makes its money on selling water and it is doing very well. It comes to a bread market and starts selling bread for $3.

The competition is quickly destroyed and the bread prices rise.

Edit: as a sibling comment mentioned: https://en.wikipedia.org/wiki/Predatory_pricing

I disagree with your definition of "market rate", but let's suppose you're right: Do you not see it as a problem that Google alone decides the cost of entry to an entire market?

The law defines practices that, while they happen in a marketplace, are anti-competitive and thus problematic. It is not anti-competitive to own the gas station next to the airport and charge a premium for gas. It is anti-competitive to buy out surrounding gas stations and close them to extract higher prices, or to conspire with competing stations to coordinate pricing.

Single-firm anticompetitive behavior, as defined by FTC: (https://www.ftc.gov/enforcement/anticompetitive-practices)

Single Firm Conduct:

"It is unlawful for a company to monopolize or attempt to monopolize trade, meaning a firm with market power cannot act to maintain or acquire a dominant position by excluding competitors or preventing new entry. It is important to note that it is not illegal for a company to have a monopoly, to charge “high prices,” or to try to achieve a monopoly position by aggressive methods. A company violates the law only if it tries to maintain or acquire a monopoly through unreasonable methods."

Horizontal Conduct:

"It is illegal for businesses to act together in ways that can limit competition, lead to higher prices, or hinder other businesses from entering the market. The FTC challenges unreasonable horizontal restraints of trade. Such agreements may be considered unreasonable when competitors interact to such a degree that they are no longer acting independently, or when collaborating gives competitors the ability to wield market power together. Certain acts are considered so harmful to competition that they are almost always illegal. These include arrangements to fix prices, divide markets, or rig bids."

That's assuming that the thing Google is buying is a commodity, and its value is the same to all parties.

This is true but long term Google can not sustain that. MS did the same in the 90s. Google is failing to execute on many 'big ideas'. Not because of a shortage of talent. But because of a shortage of follow through and nothing moves the needle anymore. That means any new product that has a shot of being interesting (say 1%) has to produce 1.6 billion pretty quickly. There are very few new businesses that start at that position. MS should have owned the cell market. Not for a lack of trying or talent. But they kept changing positions and tech stacks every few months. They lacked the will to do it. Google is in a similar position now with most of its projects outside of its 'core' ideas. What happens, fairly quickly, is the talent figures out that the company does not really value their ideas. They move out of the company and do something else.

I don't think people are complaining workers are paid too much, but that some markets are distorted by external forces.

Let's say you're a company in a field, competing against other companies in that same field. Everyone is basing wages on how much money they expect to make and so on. Not everyone has the same estimations, but in the end they're all grounded in that market.

Now comes a company with virtually limitless from some other market, who doesn't care about making money but about achieving dominance. All of the sudden, they're throwing wages around you can't compete with because they're not trying to be profitable.

Alphabet’s revenue isn’t even multiple hundreds of billions (it was $161 billion last year). Their profit is “only” in the tens of billions range.

True that Google itself sees value in paying 200K and they need to do that to attract the best talent compared to their competitors. But google has so much money that it almost makes it difficult for the little guys who could pay a good salary but not the inflated ones like google. I am not convinced that suddenly "market rate" is decided by FAANgs. No FAANG existed before 2004 (some did but weren't as powerful back then) and there were plenty of good developers/programmers even then.