This couldn't be more true. I got an offer at Intel after working there for the summer. A finance company asked what they were paying and decimated Intel's offer. Upon telling Intel the recruiter at Intel demanded to know where I was going. Luckily I wasn't going to Apple, Adobe (or one of the other companies they allegedly had illegal no competes with or I would have no job at all.
Even under definition 2, it still means 'reduce'. So if the salary was 'reduced', the second offer was less than the first one. It may have 'decimated the attractiveness' of the first salary, sure.
Drastically reduce the strength or effectiveness of (something): "plant viruses that can decimate yields".
decimated Intel's offer.
Drastically reduce the effectiveness of Intel's offer.
It fits exactly. Not only that, but you could also say:
Destroyed Intel's offer. (Def 1)
Decimate is the right word choice and it conveyed the intensity of how badly Finance Co. beat Intel's offer. Your definition of decimate may be used by heavy quants but it doesn't fit everyday usage.
Nine tenths as much to be correct. From wiki: The word decimation is derived from Latin meaning "removal of a tenth". A cohort selected for punishment by decimation was divided into groups of ten; each group drew lots (Sortition), and the soldier on whom the lot fell was executed by his nine comrades.
Ah yes, my favorite pet peeve - descriptivism vs prescriptivism in linguistics. Lives have been wasted arguing about this exact interpretation of decimate, my position is that 'decimate' in a 2013, Western context means one of the definitions posted above - i.e., significantly reduce in number, not by 10%.
