Earlier quoted context omitted.
An exception to this is the "boomerang" engineer, who leaves the company as a senior software engineer and is hired back as a principal/staff engineer. At my company, there is a belief that it's easier to become a principal by leaving than by going through the rigorous promotion process.
I am also experiencing this and thus am starting to look elsewhere (and others at my co. feel the same), I imagine it’s an industry thing but have been trying to figure out what the root cause is.
When you are employed they demand you show up every day and you supply yourself. There isn't an expectation that you wont supply yourself. After you leave but before you are hired back then there is demand but no supply. Leverage I guess. Makes sense to me.