Europeans are just as talented technically as Americans, that has never been the issue. As a broad generalization, European business culture is consistently poor at leveraging that talent to generate value, often treating it like factory work. Because American business culture is so efficient and effective at converting engineering talent into revenue, often on the scale of $1M revenue per engineer, they can easily afford to pay the higher wages while still making a fine profit. This has the side effect of making the market for engineering talent extremely competitive.

In short, European technical talent as a resource is often being wasted by poor business practices, which means there is much less money to go around. There is no reason in principle that European engineers could not earn much more in Europe but changing business culture is slow, though some companies are trying.