Rather than selling my time, a fixed-bid contract allows me to sell my expertise -- and that often is more lucrative. For example, a client may need a solution to putting hundreds of documents online and making them searchable. That may only be 40 hours of work, but it's a problem that has been costing the client tens of thousands of dollars in lost productivity each year. As an expert, I can sell them a solution to their problem in a way that saves them money and is still profitable for me.
Beyond that, a well-written fixed bid contract lets everyone know exactly what the costs and expectations are, and what the schedule is. No more having projects drag on and conflicting with other projects I need to be focusing on when we all know that there's a set deadline for the delivery of a specific solution.
Of course, doing this successfully requires knowing what questions to ask to get a detailed spec, understanding how long it'll take you to really do something, and anticipating the gray areas.
I also like to build in "flex time" into fixed-bid contracts. For instance, I might specify that the contract includes "20 hours of revisions" to the requirements once the client has had a chance to review the prototype. I'll price this into the estimate. This way the client knows they'll have a chance to make changes, but they also know there's a limit after which the project cost increases.