I based my opinion on my personal experience in several large technology companies. In these companies contractors were treated like second class citizens - they got worst offices/desks, were not invited to offsites and were assigned the most boring work that nobody else wanted to do. In one company they were not allowed to take free drinks from the fridge (this one was ridiculous). They could not work for the company for more than 12 month without taking forced three month break so they were never assigned to work on important parts of projects. Essentially - if you have choices why will you agree to work as contractor in such situation? Most of them wanted to become FTE but only a few were capable of passing interview loop.

Outside of tech or in smaller companies situation can be completely different. I can easily believe that contractors can be more vastly more qualified than average IT employee at random retail/fast food/etc company.

Another exception are people working in consulting arms of Microsoft/Oracle/HP. I know that those guys know what they are doing and can easily charge $300+/hour. I never worked with them.