[Someone1234]

I think you hinted at the real reason: Location.

Stackoverflow is largely based out of NYC, so their salaries are going to be based on that starting point.

The average developer salary in the US is $80K but when you start going state by state you can see that NYC/California/et al are throwing that figure WAY off.

[overcast]

This is correct. Outside of the big two hotbed areas, developers are definitely NOT being paid in the hundreds of thousands. When you factor in the NYC/California cost of living tax, you're not actually coming out that far ahead. The experience gained is obviously the big benefit however.

[akgerber]

Depends— if you're a single adult in NYC, a decent bedroom in a share can be had for $1000 with heat and gas included (and that's also a normal way of living for successful adults), and one doesn't need a car, so bills needn't be that high. Transport is either an unlimited Metrocard paid pre-tax or provided free by your employer, or a bicycle— so that's around $70/month, plus whatever you want to pay for cabs (but rarely need to). The upper limit on entertainment costs is extremely high— but there's also way more awesome cheap/free stuff happening than one could possibly do.

Of course, if you're trying to raise a big family, the math works out a little differently.

[overcast]

Sure, but who wants to live in that $1000 apartment, shared with other four other people? When you start making those big six figures, no one wants to deal with that crap. You want more luxury. That's the point of moving up right?