It could almost use a part 2 to explain aspects of the conversation (how is the employee making a $300k investment, preferred stock, etc), but I don't think anyone is missing the joke.
The story format makes it clear how employees are getting a worse deal than investors. Still, employees receive cash dividends every few weeks (a salary), isn't that a positive?
Because they're not working there anymore it's "demoralizing to others" if they retain the ownership that, again, they invested a part of their salary for in good faith. You've probably heard that one before.
It is absolutely outrageous to tell an employee that they're getting paid less in exchange for equity and then turn around and declare that the equity doesn't count the same as if they got paid market rates and just invested a portion of their salary.
The appropriate consideration when working for most startups is not that you're getting a cash dividend, quite the opposite - it's equivalent to the startup withholding a significant amount from each paycheck, and "buying" options/stock/whatever with that withheld money - you honestly earned that money, but you're not getting cash but something else instead. Is that something else a good value for that money?
People are usually foregoing part of the salary in lieu of options. e.g. $25k paycut (really conservative compared to FAANG) will come up to $100k over 4 years.
One can consider those $100k as cost of options you get.