Assuming a robust job market, you won't have much exposure to a company's success/failure other than through equity, so I don't think diversification makes sense as a reason to avoid equity compensation.

I could see this being a valid argument if there were systemic risk to the industry that could have a simultaneous effect on your equity and salary compensation. e.g. if you're a truck driver and get equity in your company, then automated trucks could be disastrous and you'd want to diversify away from the equity.