After some googling, I agree with you. RSU's are much better than options. So... The solution to the problem of better compensating employees could simply be giving RSU's in place of options.
Yeah, from employee standpoint RSUs are generally better. Late stage companies (GOOG, FB, AMZN) universally grant RSUs. For an early stage company I could see a few counterpoints why not go the RSU route:
1) ISOs are still tax-advantageous if you have the means to exercise them. It turns out that most of the senior hires that arrive at a rapidly growing company are hired for experience, and quite often are wealthy, so for them ISOs are a better deal. Probably minor detail, but with all else being equal a wealthy hire for VP of Sales or VP of Engineering position is more motivated to go the ISO route.
2) Companies nowadays stay private for longer periods of time, and private company shares are getting more liquidity bit by bit (SecondMarket, SharesPost, Equidate). For someone who left the company selling a portion of their holdings, either to get some spare cash, or/and to cover the tax bill associated with ISO exercise, would be nice. RSUs rob employees of that opportunity - the R is gone when company says it's gone.
3) There's certain advantage to companies having golden handcuffs on people. Frequently that means that your earliest or most productive hires are not even shopping around, since they know their share of equity is material, and they are aware they cannot cover the tax bill, so might just as well enjoy the current job.
I think RSUs are universally better for employees because your downside risk is zero. You'd have to be extremely confidant to be willing to risk money for the sake of tax savings (I suppose if the exercise price is low enough it's a non issue).
