So then why hire technically excellent people? They might expect excellent salaries or excellent working conditions.

That's like asking why do kings buy wonderful artworks when they could save their gold and hang mediocre artworks on their wall?

Either it's because they have very refined tastes and value aesthetics over money, or...

I would think technical employees would have an analogy closer to useful things like tools, rather than aesthetic stuff like art. But I’m not sure what the analogy is getting us here, anyway.

Anyway, a king that hoards priceless art seems worse? The good stuff belongs in a museum visible to the public, not a private collection or walled off throne room. And lots of the art (jewelry for example) produced for royals was just expensive gaudy crap anyway, a waste of gold.

It may still be worth hiring those people if it prevents them going to competitors. Even if you also hire a bunch of mid-range devs that cheat or get lucky. It's a classic example of uncompetitive practices being very wasteful but lucrative to the directors.