They're leaky abstractions.

Here the part that doesn't map perfectly is it's not either/or, it's a sliding scale.

People at other startups make a market rate and get a little equity, some get below market rate and a lot of equity. Even at the same company people can negotiate their position on that scale, trading one for the other.

But you were told essentially "the equity will never have value so don't worry about that scale".

But it turns out the equity could have value.

The analogy works to convey why people are feeling a certain way, it's not a 1:1 mapping to how startup equity is. That disconnect is what the words "might as well be" convey: https://english.stackexchange.com/a/171622

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Additionally unlike a true lottery there is some form of control and information on outcomes, it might feel random because companies can and do fail for unforeseen reasons, but it's not like someone is throwing darts at a board to choose which tech startup closes its doors today...

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Really I don't understand your deep lack of understanding if you're in this industry, have you never been given large amounts of equity before?

I personally chose a company that gave me solid cash compensation, but not as much as a competing offer, because they offered a lot of equity. I believed in their fundamentals and their position in the market.

Unsurprisingly the company continued to execute well and the equity ended up being worth more than quadruple my cash compensation.

I understand not relying on equity returns to plan out your financial future, but I really don't get a blanket mentality of only taking money upfront and not diversifying.

Do you not invest in the stock market either? Because that's also pretty similar to this situation... if your holdings crater to near nothing the fact you have liquidity from being on the public market doesn't really help...