"We couldn't give you more because then you would be making more than your coworkers. Do you feel like you really deserve more? You should be happy to have what you do already."

The answer is to call their bluff and tell them that yes, you do feel like you deserve more. You may or may not add that you feel like your coworkers also deserve more. You can't negotiate your coworkers' salary for them. You're only in a position to negotiate your own.

In my case I have been fighting for my colleagues salary too, since they're "linked" by company policy.

It works because even though he's not asking for more money I can tell them what the cost of replacing us is, and I can tell them if one of us leaves the other is more than likely to follow.

Yes. And that's why every employee should spend some low amount of background effort constantly interviewing elsewhere. First, to get a feeler for what the rest of the market is doing. Second, to take a better offer if available. Third, even a committed lifer needs to keep the interviewing skills sharp, in case of layoffs or bankruptcy.

You do realize that it costs companies more to continually hire. If you add real value to a company, from my experience most non-global companies see and understand that. However, in many cases the engineer is mediocre in their job (regardless of actual skill) and still expects a company to increase their pay. In a generation of people that feel something is owed to them, unfortunately the mediocre engineer covers 80% of the talent pool.

There are also places that hamstring their above average developers with processes and/or interruptions that tend to bring down a lot of potential productivity (and morale).

Yes, I do realize. If you keep interviewing, you'll get a sense of how much your talents are worth in the market. (And the mediocre engineer you talk about will see their real worth too.)