I had a contract assignment once at a major semiconductor company. Before I left, I was talking to another contractor - one who went from job to job and was paid a premium for it. He said that there were basically three categories of contract employees brought in.
1) They really need someone with the expertise for a limited amount of time.
2) They have a hiring freeze and the only way around that is with contractors even at a high price.
3) They need someone to blame.
That being said, there are a ton of contractors brought in at many companies. I remember hearing about a software engineer at Salesforce who died in a team building exercise when they were boating and he drowned in a lake. But then it was revealed he wasn't an official Salesforce engineer, but a contractor. At a team building event. It seemed a little bit weird to me, as I've heard that at many places the contractors are kept at an arm's length. When I did it, it was clear with little things that contractors weren't the same as full employees, even though we were expected to keep regular hours, show up for meetings, and were basically under the supervision of the company's engineers. There were free beverages and apparently free fruit at the cafeteria for regular employees. Even the co-op employees who hadn't finished their degrees. I think occasionally I ended up getting a free beverage when I got a meal and they didn't charge me for it, but I always made sure that my contractor's badge was visible.
Some places treat their contractors pretty well. I heard at Google, everyone gets access to the free food, gym, etc. Even people like their employee shuttle drivers. Employee shuttles can't legally be free for contractors, but I've heard they might charge $1 a ride.
There have been some weird things going on too. Once I was interviewing for a job at that same company where I had worked as a contractor, but it was a remote interview. I didn't have names of interviewers presented ahead of time, and I didn't pay attention to the name in the corner. He talked to me like he was familiar with me, but I couldn't recognize him. I did mention the names of about three or four different people I'd worked with there, and then asked for his name. Which happened to be one of the names I mentioned. I felt silly, but he had lost some weight, lost some hair, and had facial hair when he was clean shaven before.