Do investors really need to 'wise up' as you say? It seems to me that they are quite tolerant of this type of thing, because it's cost effective in the end. They're searching for billion dollar unicorns, the diamonds in the rough, and they have to launch hundreds of startups to get them. That requires a lot of young engineers willing to work for ramen and stock options. The perks required to bait them are a modest expense in the grand scheme of things.