Exactly this. I had a brief foray into this. A mentor of mine had taken over the reigns for the mobile division of a large publisher. He asked me to work on a few titles for them, and I gladly did. It sounded fun.
He was great (and remains a mentor and friend), but my GOD was the larger legal department a nightmare. They attempted to put 100% of the risk on to me. I lasted about 3 weeks before I had to tell my friend that his company was insane, and they weren't budging. Unfortunately, even as a high level executive, there wasn't much he could do.
Thus ended my brief career as a freelance game developer:)
This is yet another reason for software developers to unionize. Otherwise it'll continue to be a race to the bottom as developers continue undercutting each other and giving away any leverage they may have had.
Let developers race to the bottom for bottom-feeder work. It's no concern of yours, since that's not the sort of work you want.
You're a professional, and will deliver high-quality work in exchange for a premium rate. There are plenty of clients out there who are willing to pay for things to be done right.
All that unionizing would accomplish is dragging you and me down into that pit you describe. I'll thank you to refrain from doing so.
