One reason could be that our "bars" are different. I say that because you said:

    Why is it a problem that some people do the bare minimum? By and large they still contribute in some small way to the project

I sense that your bar might be quite a bit lower than the bar I would apply, solely based on that comment. If you think doing the bare minimum is OK, your bar very likely is below the bar that I set. While it's hard to actually define and talk about the standards we think are to be met or not, here is one thing I value and that thus goes into the bar.

You should put 100% of your effort into your work, when you work. I'm against the overwork culture that exists in a lot of Corporate America. Don't do 150%. Don't work 60 hour weeks. That doesn't impress me. What I expect from an employee is that they work however many hours their contract says they should ("nominal hours" if you will in places where this isn't well defined by contracts) and that they give 100% of what they can do during that time. After that time is done, stop working. Do other things. Be with family. Be with friends. Go on a date and start a family or whatever floats your boat but stay away from work. But if I see you on your phone, looking through Facebook or Reddit or HN every time I enter the room (and you quickly put it away) we're not going to be friends. I love WFH btw. Never want to go back into the office. But you better not "do the bare minimum", i.e. be on HN 80% of your time that you "work".

EDIT: And of course that doesn't mean you can't ever check stuff on your phone or whatever during the workday. But there is a strong correlation between people with sub-par output and those behaviors, especially if they tend to quickly put their phones away as if you "caught them".

I don't know why you mention this in reply to my comment. I don't see how this is related.

Now with that said, of course we have standards. That's the bar ;)

The point I was making is that it seems that the average developer is so far below the bar, that I don't want to hire average developers.

Of course there are some juniors (and even some seniors) that will take to code review comments, pairing with them, mentoring them, giving feedback etc. and will improve. Many many don't. Like mentioned elsewhere in the threads here, I think at least some of that has to do with the fact that so many developers have entered the market but they actually aren't good at it. They're in it for the money. They pull the average so far down that hiring average developers is excruciatingly frustrating.