Personally, as a product design manager, I like to find the middle ground. Having a set of "4x" employees is useful when you also have a number of "1x"and "2x" employees that can learn and grow from the influence of the highest skill and/or productive employees.

Attempting to build a "quantity over quality" organization is bad for the reasons you list, but "all quality, no quantity" is a close second in being detrimental.

Each critical "4x" employee that you have is only beneficial if they stay at your company. Burning them out because a company is ruthlessly focused on keeping their staffing lean by only hiring "4x unicorn-ninja-guru-rockstar" developers is a quick way to trigger management to swing the pendulum too far in the opposite direction.

Edit: fixed a typo