I think part of this is because of company/domain knowledge. It may not be that the person is necessarily "senior" level generic technological talent, but they have built up deep knowledge of the companies systems to become a key part of the team's brain trust. I feel like I see this leading to title advancement just as much as technical aptitude. The flipside is that it is somewhat specific to the exact employer, but it should signal ability and willingness to become an expert of the company's product domain. A lot of times I think that is more valuable than raw technical ability anyway, but it's harder to interview for.

generally startups hand out titles like cheap candy on a reception desk.

Regard notions of "senior" in the tech world as you would "vice president" in banking.

It's where the "senior" distinction isn't very useful I think... It's very possible to be leading/running a team in three years in nearly any profession if you are good at what you are doing. Does that make you "senior"? In relation to the people below you, sure... But maybe just using "team lead" or something is more accurate.

uhh in most industries its given out way too liberally.