"every other startup would have given me the same deal or worse"

Not true. I talked to a bunch of my entrepreneurial friends about this when I encountered this situation again and again. Their own hirees were treated more like I'd expect - a clear advantage to taking the offer - lower pay meant higher equity although it was never as bad as this case.

Glad things worked out for you though. There are winners in the industry and it's nice to see it when it happens!