> investing in their stock is often quite unresponsible as well

Often, but not always. You work there. And you are surrounded by others evaluating the same, or a similar, investment. That creates the possibility of an edge.

That possibility doesn’t exist for non-insiders. Without those advantages you’re relying on “knowing the right guy”. Nothing more.

You work at the place so you are already invested in them, and are surrounded by others who are also already invested in them. So you and your colleagues already do the bet that the startup is going to be successful, which might skew your judgement on further investment. Sure, you know more about the company than a small investor would, but neither of two cases give you a board seat, which would give you insight into how the company is really doing, and there are no regulated shareholder communications like a public company has.

Nobody is arguing private employee stock is a good deal. Just that it isn’t necessarily a bad deal.