We may be wholly worthless pimps ...
There are two fundamental problems that agencies face:
The first is lack of respect, that's respect OF them (though some may argue they show little or no respect to prospects, but that's a different problem). Software is essentially a creative process. Like all creative industries, respect comes from the people around you being aware of your past work and giving you respect for those achievements. Recruiters come into the software world with no background, and no IT history. They don't have the vocabulary, although they speak fluent non-sequitur. Nor do they have the experience or knowledge to converse with softies as equals - yet they control our futures and our prospects. That is not a recipe for a successful relationship.
The second basic flaw is a lack of transparency. You send off your CV and wait .... and finally someone calls you, they dismiss your 5 years of SAP development in the City and ask if you want a second tier support job in Sheffield - debuggering Windows Server 2008 apps. There is no visible connection between what a prospect sends in and what opportunities pop out. Even worse is that this happens not just between the recruiter and the applicant but also between the recruiter and their client. The end result is frustration all round. Everyone has to deal with a world full of imperfect information. However, when it's clear that the person you are relying on as the gateway to ANY new position has a PhD in obsfucation there is no possibility to build trust - as past experience is that most interviews will be a fools errand.
As for being wholly worthless. I think you're selling yourself a bit short. Even a pimp has some scrap value.