I'm self-employed and tend to work for a single client at a time, usually on projects of between half a year and two years. I work on a team with employees, doing similar work, except I'm more empowered, more in control of my own way of working (also because the tax service demands that, which is good in this case). I'm not being exploited the way employees or gig workers are. And if the government thinks this is some kind of tax loophole, I'd happily pay more tax, as long as I can continue working this way.
If you need someone to come in on your greenfield project and hit the ground running, thats what contractors are usually used for; the beginning and the end of the lifecycle.
For engineers for example, you will earn higher income and pay less tax, different rates. And larger companies usually have a set asside budget for contractors.
Its easier as an engineer as its never hard to find another job. If this wasn't the case, you would see a higher percentage of employees who require job securoty.
Nothing to do with regulation from my experience, just better pay and more flexibility.
I strongly disagree, it might be all relative of course, but dismal is not a word that would even come close.