I disagree, also speaking as someone who's seen a mix of runs as a contractor, consultant and staff employee. It's the individual who is very productive or not, not the role they are filling.
But contractors, like entrepreneurs, are self-serving individuals. If your company has a large codebase and you depend too much on contractors, they may create a 'clan' inside your company and they will have leverage over management. I've seen this happen in large companies, never in a startup though.
I agree though that it's not because they're contractors. It's more because they're greedy.