[tgsovlerkhgsel]

Your cost to provide the service (i.e. your minimal cost to exist) is probably somewhere around $30k.

The value you deliver depends strongly on the company but can easily be orders of magnitude above $400k.

Everything in between is a matter of negotiation, supply and demand. If there are enough companies that can make their business model work at $400k to hire all the capable engineers at $400k, then the business models that can only pay less won't work, just like many other unprofitable business ideas don't. That is not a sign of a problem.

Quite the opposite, actually. If that is the limiting factor, it means that the demand is very elastic, i.e. if there is an increase in supply, prices (salaries) will not drop too much.