I don't disagree however the paycheck for engineering employees is often a lot less than one could get from established companies. Every startup I've talked to sold equity as a large part of the total compensation and argued it makes up for the cash difference.

So you're being asked to give up $100-200k/year worth of salary by joining a startup which isn't trivial. For a tiny fraction of equity with multiple restrictions (10 year expiration, 90 day window to exercise on leaving, can't sell it, etc.).