I'm sorry, but when I hear "so-and-so's overqualified and more experienced and therefore more expensive" I really have to wonder how this becomes such a common topic in hiring conversations.
Certainly, some positions require a great deal of negotiation for both parties to arrive at a price - but most jobs really don't work that way at all, do they?
No, most jobs have a static pay rate or relatively fixed contract budget and either you accept what they offer, or you move on.
Same for the other side of the table - do most managers really have the authority to grossly overspend on talent? Really? "Spent too much on that guy, $50K to script batch processes at 3rd shift at a colo, and he just isn't innovating... That's what I get for hiring a college graduate... "
If you are looking for the best, you spend and take that risk, if not, you make a reasonable offer and if they counter too high, you say, "this is what the position pays, do you want it or not?"
At some businesses, you start as a temp, no matter what your experience. At a Big NYC Agency, you start in the mail room, even if you've passed the bar exam in 2 states. Given that this model is successful for some very successful firms, maybe businesses that "overpay for talent" are really just overpaying too many middle-managers or doing a piss-poor job of recruiting. Or, maybe it's a complaint without any merit at all, designed to create a chilling effect on an aging workforce to get them to give up things like benefits