When a company sells, it negotiates with its buyer for a long time to come up with a price and terms for the deal. Former employee stockholders are iced out of that negotiation. The buyer and sellers have levers to pull that improve the outcome for themselves at the expense of former employees; for instance, the terms of the deal can include retention bonuses paid to employees, and in fact are sometimes dominated by those bonuses. Nobody needs to decide to be evil to make something like this happen! It's rational for the buyer to want to extend additional benefits to keep employees, and management is numbered among those employees.
I've had friends who paid significant amounts of money for their stock only to have it end up worth 0 in subsequent high-8-figure sales.
Why is that a bad thing? If not exercised, those options disappear, and essentially everyone else is not diluted. If the options remain on the books, it affects everyone else.
Also, from a company perspective, that's a rough go, because earlier shares tend to be worth quite a bit more (whether because of lower strike prices or whether the early employee got a bigger percentage of the company), so you end up with cases of someone who put in a year early on and left holding a significant portion of the company when people who stick it out for longer get much less.
Of course, in any case, the company can always issue more shared to dilute out the early shareholders who left, while dishing out the new shares to everyone who is still employed, but then you're right back to square one.