This doesn't go bothways, because there's either more demand for developers than supply or more supply than demand. Currently we live in a time where there is more demand than supply, hence why developers get treated relatively well in comparison to other professions. There's a reason why developers get ping pong tables but not accountants.
So the fact that "company is frequently interviewing" only shows how much demand there is and how hard it is to fill a position with the right person. Once you have the right people on board, they can ask a lot more than what they get, because replacing them can be significantly more time and resource/money consuming and then it's not even guaranteed that they will be as good as the ones you have right now.
This is basic free market, the side of it which has the upper hand right now needs to play its cards to max out wealth and every employee should be encouraged to do so, because it will overall only increase economic growth. It doesn't always has to come from business growth, if workers can gain significant wealth based on the same principle then they should, because it will only increase more spending and investment of those people into new areas again.
Devs get ping-pong tables because they can be bought off in other ways besides money because they are naive.
I loved your comment about "max out wealth" because that is the underlying truth to all of this--you get maybe 30 years to make as much money as possible and that's it!
And if you think about it, moving every 2 years is 15 different companies. If you stay a bit longer at the ones you like, say 5 years, then that's 6 companies in your employable lifetime. To put it another way you have 5-10 big projects that you can do in your (employable) life. (I think Jeff Atwood said something like that before).
This is of course for people that value what they do at work and want to make meaningful impact professionally in their lives. For other people family is much more important so it doesn't matter if they don't min/max the projects they work on.
So the fact that "company is frequently interviewing" only shows how much demand there is and how hard it is to fill a position with the right person. Once you have the right people on board, they can ask a lot more than what they get, because replacing them can be significantly more time and resource/money consuming and then it's not even guaranteed that they will be as good as the ones you have right now.
This is basic free market, the side of it which has the upper hand right now needs to play its cards to max out wealth and every employee should be encouraged to do so, because it will overall only increase economic growth. It doesn't always has to come from business growth, if workers can gain significant wealth based on the same principle then they should, because it will only increase more spending and investment of those people into new areas again.