The dictionary definition of the word empathy does not conflate it with sympathy, at all. It is simply "the action of understanding, being aware of, being sensitive to, and vicariously experiencing the feelings, thoughts, and experience of another" and has fuck all to do with whether or not you have the other's best interests at heart.

Paul Graham writes with precision, and he has written extensively and correctly about empathy. Now, does this mean that he is incapable of hoping that some of his readers conflate empathy with sympathy? Not at all. You have incorrectly made this conflation, but correctly understood that he is not describing behavior borne out of sympathy. Others may incorrectly make the same conflation and incorrectly understand that he is sympathetic.

But Mr. Graham himself wrote extensively on empathy, 23 years ago ( https://www.paulgraham.com/hp.html ):

"Like painting, most software is intended for a human audience. And so hackers, like painters, must have empathy to do really great work. You have to be able to see things from the user's point of view.

When I was a kid I was always being told to look at things from someone else's point of view. What this always meant in practice was to do what someone else wanted, instead of what I wanted. This of course gave empathy a bad name, and I made a point of not cultivating it.

Boy, was I wrong. It turns out that looking at things from other people's point of view is practically the secret of success. It doesn't necessarily mean being self-sacrificing. Far from it. Understanding how someone else sees things doesn't imply that you'll act in his interest; in some situations-- in war, for example-- you want to do exactly the opposite."

Now, if you read that carefully and don't conflate empathy with sympathy, you can understand that, for someone like Mr. Graham, empathy is orthogonal to exploitation -- it's a guide to maximum value extraction over the long term, which may or may not require exploitative techniques, depending on the circumstances.