I don't think it's necessarily a bad thing, though. In some of these fields, one of the bottlenecks seems to be the low numbers of researchers worldwide in the area. While the students do provide cheap labour, they also (depending on the fame of the professor) get immense networking resources. Since the field has comparatively few people, the big names all know each other, and all help get their students hired post-thesis.
Nepotism? Perhaps. But for the research program I'm thinking of in particular, if the problem does get solved, it'll revolutionize mathematics. Talking to some of the students involved, I feel that's why they're willing to put up with being cheap labor -- they're getting paid in happiness and a feeling of being worthy.
I think good advisors (should) enjoy supervising for the sake of supervising, but that doesn't mean it doesn't also boost their CV's.
We did co-author a paper later, but it wasn't about anything in my thesis. I certainly didn't hear any indication from him that he disapproved of my thesis, though -- he was just happy to let me work independently, and it would have been entirely improper for his name to appear on work he hadn't contributed to.