Companies similarly worry about a hit to team cohesion that could result if team-members find out that some of them are paid much more than others.
We feel that in the long run, this can only hurt us through negative morale, high turnover, and destructive office politics."
It really wasn't good for morale. A lot of time was wasted worrying about salaries rather than building products.
That being said, I also think that a lot of people are stuck in a bit of a vicious circle. These same people know they don't have a lot of financial knowledge, but they also don't know who to ask or how to ask primarily because no one around them would talk about money or finances.
My kids will know how much their stuff costs, and they will earn their luxuries.
Another reason was that, even when only estimating spending, as a kid I tended to over-emphasize "conspicuous consumption" and gadgets: assumed the people with bigger TVs, new game consoles, better cars, etc. were wealthier. What I massively underestimated was the cost of "nice" vacations (esp. compared to relatively minor items like game consoles), so it was really the people who liked to travel a lot who spent more, but I never saw their spending happen when I was around.
edit: To add one more confound, I think I also put too much emphasis on "class" associations: I assumed parents working blue-collar jobs made less than white-collar, which was not always true, esp. when you took into account that some blue-collar families had 2x incomes.