Totally right. Many people would rightly like to get rid of contractors... because they are expensive. You only take on contractors if you have a clear and present need to get stuff done urgently. And contractors will "get things done", as they know they generally won't be kept around unless they are adding value.
Oh, and when business slows down you don't have to think about redundancy payments, you just shrink your contractor workforce. No hard feelings, and thanks for all the fish.