One of the primary benefits of an external contractor is that they are mostly unaffected by whatever politics are occurring within the company. This means that they're more likely to give direct, honest feedback, and they won't worry very much about whose feelings it hurts. This is supremely valuable in most organizations, and impossible for most employees to provide if they want to stick around for more than a few months.

There are unreasonable people everywhere, of course, so it's not that weird to find a client who doesn't understand the value of this service.