Are plenty of people happy with that kind of stake? Absolutely.
Do you need to get paid in stock to get paid well? No, in fact in many cases its gambling with market forces you simply cannot control.
I dont mean to say you should burn your life for a business, but if you simply dont care because "I am a programmer and I dont need to" imho your general effectiveness is going to be low, your skill progression isnt going to be fast, and your chance of getting hired somewhere with equity that isnt a shitshow is also low.
That "stake" is a product of how good the employer is relative to others, how hard it is to find another job and the job market for the position in general. I don't begrudge people for being happy with that. I am one of them. But a first order approximation of this "stake" can be summed up as "no stake."
Sounds like you should start a business.
Whether the parent poster should start a business is irrelevant to whether or not it's bullshit to ask/expect employees to be motivated as if they have a larger material stake in the business than they do.
What it does mean is that your stake is not directly 1:1 tied to the business success. This goes back to gambling, if you are the house and take money on every deal, you have a stake in deals continuing to happen.
You are right that your pay is based on many factors, and so would your equity.
So I disagree with your summation, and I think its improper to pretend that equity is the best way to get paid and to care about what you are building (especially when you believe in a product but risk is high.)
To your second point, you can argue (and I think successfully) that having more of a direct stake in a business will increase your personal investment, but that is literally the concept of ownership.
If you think the current practices are bullshit I do believe starting your own highly successful business is the correct approach; you get what you want and if you are successful enough, the industry will change behind you.
I did not say "you should work as if you have a greater investment than you do" during any part of my comments, simply that if you dont care about the product you will not produce quality work.
If someone isnt paying you what you are worth, you are not going to produce quality work.
Start a business... I've thought about it. If only it were so easy. Even if I did, that solves the problem for me, but not anyone else.
To be clear, that's stock with dividends and voting rights. Something like democratic control over the workplace would do wonders for morale. Then managers answer to the body of employees as a whole, not the "boss."