Honestly, IMHO it's because people immediately ratchet their expectations up to the highest level of of pay they can earn. If you use up all your market power on pay, you don't have much left for other conditions.

I get paid 60% of what I made at my last job because there were certain things I wanted to be different in my work environment. Too many people optimize only for pay and then complain that nothing else works the way they want it to. Cut some salary off of your top line and you'll find that the leverage that gives you in other areas is pretty huge, particularly at companies that aren't bogged down in bureaucracy. If your salary is too low to comfortably trade off against, then you're obviously not one of the examples of people with market power.

Now don't get me wrong: most of these things are positive-sum, and ideally they wouldn't trade off against pay because they might increase productivity. But that doesn't have much to do with being a seller's market.