Is it 100% clear that there's a Good Guy and Bad Guy here? Is employment 100% preferable to freelancers? In many cases it is, but there are people who would say, "I get my benefits from somewhere else, and don't want to be locked in to 30+ hours per week. I prefer to pocket a higher hourly wage."

Why force a company to choose one way or the other?

I'm now talking in the abstract, and not defending one company over another. I'm also not defending a situation where there is a clear case of everyone actually being full time employees.