While you could convince me that too much money would attract the wrong type of people, you would be hard pressed to find more competent people by offering less money. (I'm not dismissing that there are other motivations involved, just the ability to grow a talent pool by offering less.)
Once you have a "good life" you start looking for other things than money. I know a few people who have quit a good job they didn't like for one that paid a little less but they liked more. Though there is a limit to how far someone can go down in pay before they don't like the new job because of pay.
