I've been in this industry for a few decades at this point and I was around when this meme was started.
It was purely about maxing your compensation because changing jobs nets you more than promotions & raises.
I've never met an engineer in my life who truly earned a promotion every year and very few every two. Very few companies have org charts that even support that or have that many levels. This logic/advice only really applies at a few companies and people have adopted it no matter where they work. There's not enough growth/hiring at 95% of companies to even come close. The Peter Principle is also a real thing. Everyone's competence has a ceiling.
There's even an implicit understanding of this that people at smaller companies have inflated titles and you typically rank them down 1-2 levels when hiring/acquiring at larger companies.
Now I do agree that companies haven't been investing in their engineers, but that doesn't also mean this isn't a vicious cycle. Employers and employees are in a mexican standoff and things are only going to get worse until one side comes to its senses. Employers have all the leverage for it to not be them.
For the vast majority of companies the average tenure of an engineer sits between 18 and 30 months. They're also mostly hiring young engineers in their 20s. As an employer what is your upside to making such investments before they're at least mid-career? A lot of people seem to want the world and offer nothing in return for it.