[jondubois]

Yes that's true. Contractors are often more skilled than non-contractors (they've often older and had a wider range of experiences).

But contractors, like entrepreneurs, are self-serving individuals. If your company has a large codebase and you depend too much on contractors, they may create a 'clan' inside your company and they will have leverage over management. I've seen this happen in large companies, never in a startup though.

I agree though that it's not because they're contractors. It's more because they're greedy.