I don't know the particular situation and compensation packages of pilots who decided to pursue VX and I won't write directly to that. As a resident of a silicon valley, however, I will write to the concept of start-up businesses based on my personal experience and those of friends. When you start a business it is normal to have less than standard pay - you have very limited capital with which to grow. In exchange for that sacrifice you receive equity. If you are talented enough to make your business grow and prosper you are rewarded accordingly. If you make a mistake or things otherwise just don't work out your equity dwindles to diddley squat. It's a calculated gamble on your own mind as well as those you associate with. There's nothing wrong with that - it is part of the American way Doug mentioned. If it is unacceptable don't use Google, ever. Or airplanes.
If, hypothetically, pilots were offered considerable equity to join Virgin then I would not call their actions lowering the bar. They are merely making an investment that seems potentially very profitable to them. Is it an investment I would make? Probably not, but it's their choice.
If there was little to no equity involved, well then Velocipede, have at 'em. But as ppragman suggests, it is probably better to wish them motivation to create higher pay and better working conditions than punishment in a fiery hell.