I think you could take the opposite view as well. Yes, if they could treat employees poorly then they would, but they can't so they don't. There is more demand for talent than there is supply of talent. I work at a company that has both contractors and full time employees, and it is very obvious when looking at work product why the contractors are the contractors and the full time employees are the full time employees.
Contractor output is frequently technically shoddy or lazy; their reports are riddled with grammatical mistakes and frequently difficult to understand; and there is no way that they could take point when interfacing with a customer as their English skills simply aren't good enough.