My experience, coming as somebody who has experience on the large end of embedded (100's of MHz, 100's of MB RAM, MMU, running Linux), albeit a while ago, is that it's hard to break back into it if you've been out of the community for a while.
The last time I was looking for a job, I had been doing non-embedded, including kernel and low-level for 8 years or so, and I had the darnedest time finding embedded positions to apply for, let alone get calls back from.
Startups that do embedded seem to mostly get the embedded done in the MVP stage, and by the time they're looking to grow, they've got a (small) team already doing that work.
In fairness, this is partially self-inflicted; iRobot has been on the monthly whoishiring threads for as long as I've been looking for jobs in the Boston area, but I decided long ago that I'd never work in defense (or finance).
Recently, I've added to that list "companies whose business model is selling their users' information" (many of them these days), and "companies whose entire sales pitch plays on your fears" (a recruiter tried to put me in touch with a company that does baby monitors that measure some basic health parameters, and their promotional video was appalling to me).
I kind of stuck a toe across the first line, and tried talking to somebody Fitbit-esque, but never got a call back. I also wound up with a connection into an electronic paper company, but that went cold after submitting a resume. Ditto a company that does automotive suspension stuff.
I realize that being out of the community for a while makes it hard to get consideration if there are other candidates who have current experience, so I started a personal project building a clock out of VFD tubes, and added a github link to my resume before submitting several of those. That didn't seem to help.
I got hired doing non-embedded before I finished the clock project. I'm at the point of needing to learn EAGLE, lay out boards and get them made. That was a year and a bit ago; right now I've got other projects that take up my weekend time.
To respond directly to your point, I'm willing to bet that there are two factors at work:
1. Supply and demand. If demand exceeded supply, I would think that I'd at least be able to get a call back with my background.
2. Hardware is a hard row to hoe. There's a lot less capital invested in a hotness.js project that flops, and it's a lot easier to scale if it takes off. No, it's not necessarily easy, but there's a wide gap between "provision more instances on EC2 and fix the bottlenecks in the architectures" and "the factory is already at capacity and the supplier for the key part is backordered for 3 months". The money that doesn't need to go to covering those risks can go into your pockets.