Silicon Valley startups are to investment what a day at the races is to a broker. You hope you'll pick a winner but ultimately those horses are not where the majority of the population's investment goes.
Age discrimination seems to be a significantly smaller problem outside of Silicon Valley. [e.g. Finance, Retail] So its quite possible they are sacrificing experience for other things they think are worth it in SV.
It's a little bit of a mis-measurement of things though. I'm not sure quality software engineers make so much more on average, it's just that the percentage of the population that are quality software engineers is much higher. It's a pretty forced selection bias since if you're just mediocre you might self-select out (note: this is just one of many reasons you might self-select out).
The salary for any given employee is not a limiting factor. I think this is true. Even when you have a very limited budget, many places will prefer to be under head count with a higher performing team. If you can get that guy who is going to let you avoid running down rabbit holes all day, every day, they are worth the extra bucks.
I think the problem is that these people are hard to find -- whether young or old.
"I think the problem is that these people are hard to find -- whether young or old."
Find as employees, and its harder to find them as they get old. I've already found myself, my family and I have a high standard of living without having to put up with open offices, long commutes, cult like office culture, more than 80 hours a week, or less than six month runway till we're all unemployed. Maybe I could be convinced to consult? The odds of this being the situation at 42 are a bit higher than at 22 and the odds rise over time.
Life is different now, WRT culture fit, for example, a quarter century ago employers didn't care about my religion or lack thereof, or my reading matter or hobbies, but now its all about everyone trying to fake that they're the same 22 year old kid, which is really weird. I think I'm a pretty good actor and if I got accepted into a cult like environment, it would be really weird for everyone when I stopped acting, so I'm not sure hiring people based on acting skills is necessarily producing culture fit to begin with.
Strangely, I'm told that the best work teams have great interview actors and/or really are groupthinkers of the highest (lowest?) caliber, yet observation and experience show the most productive teams I've seen have been fairly diverse. Maybe they're trying to select for the best liars in interviews. (Yeah boss, just like you said, groupthink is awesome!)