This is clearly not the case, else nobody would be willing to work for a factory farm.
The opposite appears to be true. People become desensitized - at least the ones who can handle the initial shock. Also, in some regions of the world (and in developed countries), generations have grown up with a company mentality and seem incapable of considering things from any other perspective.
As someone who has recently joined that club, I agree. I have been hunting for years but this year I killed my first deer. The whole process changed something inside of me.
Because of my actions, this gentle creature went from breathing, living and doing whatever it wanted to being food.
While I was aiming my shot, she turned her head towards me and looked at me. I can clearly remember seeing her blink.
I put the arrow through her heart and lungs. I dragged her out of the woods. I gutted her and hung her up. I packed her body in ice.
These were things that I had seen done before but never did myself.
As I was field dressing the body, I looked at her and apologized, then I thanked her for providing healthy meat to feed my family.
In my mind, it changed venison from butcher paper wrapped meat that was leaner than beef into the flesh of an animal that was killed.
I don't know what she thought but I think she was, on some level, self aware.
From my viewpoint, our current views on the killing of animals are as much a reflection of our cultural fear of death as anything.
Death used to be an ever-present part of life. Killing an animal was viewed as taking the life of something else to prolong your own. And all to often, people would die in horrific ways anyway.
Now, death is a thing we try to hide away and not talk about. So we also hide away the killing of animals for meat. Death is a taboo in our society in some ways.