You're not wrong, but you're also getting the full story. "Contractor" often is the title used for bodyshops. However, there's also tons of freelancers and Consultants, and "Consultant" can be a much less negative thing than you're implying.

Many of the higher-end software engineers negotiate their own contracts, and in doing so act as "Consultants", because corporate standard contracts don't work for them. It's not usually about pay - FAANG has pay ranges that go up - But in the before times, it included things like WFH and additional allowances for time off.