People running the companies know what they're doing. They're in it to make money and if they're publicly traded, make their shareholders happy. It makes perfect business sense to run operations the way so many game companies operate (which is why they've moved to that model), simply because the artists/programmers/etc are purely expendable.

The story where the family keeps popping out kids despite a totally unstable lifestyle in a volatile industry is just one of many that show how much bullshit people are willing to put up with to say that they make games. Grass roots, indie/sharware-style development is where it's at if you're in it for the love of it, but unfortunately avenues like Kickstarter have been highjacked by larger companies that have turned it into a new preorder market instead of a direct pipeline for small scale VC raising.

The only way the current system is going to ever change is if young, impressionable developers grow a god damn pair of balls and stop fucking applying at these fucked up companies in this fucked up industry. Work small scale on shoestring budgets, do shit in your spare time while working a real job, or just chase the dollar signs and work in the oil industry. They need tech savvy people there and they pay real. fucking. well.