They are losing money via dilution for the shareholders at the time that they issued the stock.
I'm not sure what you mean by "losing money via dilution". Companies don't lose money via the market repricing their shares. Shareholders may lose money. But in aggregate, there are also more shareholders, so one group of shareholders loses some money and another group of shareholders gains some money. In aggregate, shareholders don't lose money.
Happily, the FASB isn't fooled by this particular sleight-of-hand. Not anymore, at any rate; they quit letting themselves get bamboozled by Silicon Valley flim-flam accounting for options more than 15 year ago.
If the shareholders have constant ongoing dilution due to continual share issuance, they have run just to stay in place. This is pretty straightforward, and what the GAAP are communicating to FS readers. You have a comp expense, of course (you gave something valuable to an employee instead of selling it for cash), and you also have the dilution, without even getting the cash in return. It's the only appropriate way to account for it.
It is a very expensive form of compensation.
As with any other way of spending money, that is often in their shareholders' best interest, but arguing that it is not an expense is nonsense.