Or... they think they do. "Current company" is too amorphous. Direct manager and team mates may know value, but it's harder to make that judgement (or to believe someone making the case for it) when you're not in the trenches with that team.
May also be a situation where the new company is actually able to extract more value from the person than the previous company.
There's a lot of assumptions going on in some of the replies here. Old company is going down the pan - regardless of how much value an individual can bring, if the company is incapable of translating that in to market value, you'll never get the raise (and may not have a job soon). New company - taking the same person with the same skills - may be able to extract much more market value from that same person.
That is basically the same thing the poster you replied to said, except from the perspective of the current company and not the new one. The current company knows his performance. The hiring company is making an educated guess from maybe 10 hours of interaction and a resume.
I don't doubt that the hiring company may be able to get more value from the individual, hence offering a higher salary. Market rate is highly dependent on the market, and "Software Engineer" is not a market. The current employer is in a better position to understand the employees current value to the company. They may not be tracking it, but they are in a position that they could probably understand the value of the individual, and determine if an increase in compensation is worth the current value or future value they are getting from them.
Or... they think they do. "Current company" is too amorphous. Direct manager and team mates may know value, but it's harder to make that judgement (or to believe someone making the case for it) when you're not in the trenches with that team.
May also be a situation where the new company is actually able to extract more value from the person than the previous company.
There's a lot of assumptions going on in some of the replies here. Old company is going down the pan - regardless of how much value an individual can bring, if the company is incapable of translating that in to market value, you'll never get the raise (and may not have a job soon). New company - taking the same person with the same skills - may be able to extract much more market value from that same person.