Can you relocate? I have seen shops like this, but if you can relocate that expands your options by several orders of magnitude.
One example: where I work we have our choice of windows/mac/linux (though if you want to run a linux other than debian, ubuntu or redhat/centos, you're on your own as far as IT is concerned); workstation upgrades are every 3 years. I'm due for a new one in May, so I only have 8GB of ram right now. Every desk has at least two monitors, and every office has a door[1].
This is not in SV, nor is Fog Creek (where Joel wrote the "Joel Test" from).
It costs nearly $200k to employ a software developer after taxes and benefits, so not being willing to shell out a few thousand a year in tools that will give a performance benefit (even if it's just making that person happier in their job), is wasteful.
1: There have been points in the past where cubes were used as a stopgap while we were finding more square-footage, including when I started. The person getting me set-up apologized for putting me in a cube.