It's a mixed bag. Many very talented engineers become contractors because they get sick of low pay, company politics, and the fact they get treated like a cog. So instead they embrace the cog concept and get paid well at the same time. These contractors will tend to care and do a really great job. On the other hand, you have the scabs that become contractors soley because it pays well - and also because generally it's easier to get hired as a contractor (less strict hiring process since it is a fixed contract length). That kind of person gives contractors a bad name. I've seen some of the worst and some of the best developers as contractors.

This is even more pronounced in the UK where permanent employee pay is very low, compared to contractor pay. Generally the best engineers all end up becoming either contractors or go into finance where they can get paid well. And unfortunately the engineers who could never get employed as a perm employee also become contractors.