Jason,
I have a theory, based on what I view as the most optimal way that labor markets work.
Based on the system that we live in, everybody tends to benefit, when (in aggregate) everybody looks out for their self-interest. If they are not allowed to, there are distortions which actually impairs the benefits to both parties.
For instance, if employees look out for their own self-interest, they will do everything to get the best benefits. Likewise, if the company looks out for its own self-interest, it will aggressively try to attract the best talent. By doing that, they force existing employees to look out for their own self-interest by being the best they can be (i.e. as good as, or better than, incoming employees). Also, when companies aggressively try to attract the best talent, they tend to do things like listen to what the talents want and employ those things (more paid sick time, cafeterias, the best development machines, reasonable working hours, etc.).
When employees are the best they can be, and their employer is not doing everything they can to retain them, they can leave. That forces the employer to become better at retaining employees - which forces other employers to do the same and creates a perpetuating cycle.
So when a company undermines that, by for instance cancelling sick leave, or forcing 80-hour work weeks into perpetuity, the short term effects are that employees will leave (if they are the best they can be at what they do, which we can assume they are otherwise they wouldn't be at the company) to greener pastures and if the company self corrects, they will once again attract and retain the best talent. If they don't self-correct, they will die. Perhaps a slow, long, death. Or just exist in limbo with lots of D class employees providing mediocre service.
We see this phenomena playing itself out in the Valley now between Google and Facebook. But it's not new. Before it was Yahoo and Google, Google and Microsoft, Microsoft and IBM, Apple and Microsoft, etc.
That's one of the reasons that I think that unions are a bad idea - because they distort this mechanism and allow employees to get lazy and not make sure they are the best at what they do (or add significant value in some other way).
Based on my theory, I think you are missing the idea. Forcing your employees to live through hell, but spraying their face with mist every now and then (with chefs, and laundry service - which were, quite ironically, forced on you by your other successful competitors) and telling them they are cool, doesn't make hell any cooler. At the end of the day, it's still hell. And they know it.
I don't believe that you would have a chef, laundry service, car washing, etc. if Google, Facebook, et al. didn't have similar services and you weren't competing with them. That, however, is just based on what I have deduced from public statements that you have made - so that could be wrong.