Not to mention being your own full-time benefits manager isn't free and should be reflected in your contracting/hourly/non-W2-with-immediate-salary-and-employer-benefits wage.
Yes. They say that as a contractor you should ask for your desired FTE yearly salary divided by 1000, per hour. So the equivalent for a $120k/year FTE position would be contracting full time at $120/hour. As far as I know it's not any easier to find 40 hours/week at $120/hour contracting than it is to find a $120k FTE position.