That's just not true. Many, many engineers severely undervalue themselves for a variety of reasons. For some, underconfidence. Even for those that are confident in themselves, for many there's a fairness issue. ("Do I really need more than 100K?") Also, if they're in one underpaid job, the anchoring effect is pretty strong. I know someone who was in DC for <70k, applied to work remotely for a Valley company, and when they said yes, he asked for a big raise to 90k. They valued retention enough that they decided to actually pay him what he was worth and what comparable teammates got, tens of thousands a year more.

People are socialized to try to make others happy, not inconvenience someone by asking for more than they feel is necessary and fair, etc. This does not speak to their competence, though it might also mean that they're less effective at making you realize how competent they are once you hire them (because they're also the type of people who don't flash all of their accomplishments in front of you).

Women also tend to fall into this even moreso because of gender socialization.