I unreservedly agree that Steve should have compensated these engineers for their work, even if only for the selfish reason of encouraging its engineers to push

I unreservedly agree that Steve should have compensated these engineers for their work, even if only for the selfish reason of encouraging its engineers to push boundaries of engineering, and to slow the rate of engineers leaving. But on the same token these engineers should have known that as full time employees, work they did during "outside hours" belonged to their employer. And I think that's fair, since that work relied upon knowledge and materials acquired through their employer. Not to mention access to people like Bud Tribble whenever you need it! The moral of the story is that if you want to engage in skunkworks and you think you should be rewarded for its outcomes, talk to your manager ahead of time (in abstract terms, if necessary) about potential bounties or bonuses for doing such work. If you don't set any expectations ahead of time, expect nothing.