The grass is always greener on the other side of the fence. I'm an in-house developer thinking about going the contracting route because I never get to work on new things. But it all depends on the company and what their goals for the in-house team are. There's no universal in-house mindset, or contracting mindset.
For my specific position, the company out-sources almost all of the heavy lifting (the fun stuff) and uses in-house developers simply to integrate what the vendors deliver and make throw-away one-off things like landing pages for a short ad campaign and more often than not get stuck helping the in-house IT team do stuff, because after all we're all just computer guys to the users. Writing bulk data update scripts for the CMS content because the content team can't be bothered to enter data into a form when they can instead do it in an Excel sheet and send it to us, writing web-services for the vendors to access our data so, or console applications to automate some routine maintenance task.
If you're going to go in-house, you have to know that the primary focus, and ultimate deciding factor in everything that company does, is going to drive whatever they do. If you work for a retail outlet and what you do doesn't directly and implicitly translate to retail sales, in such a 1 to 1 way that any stereotypical big dumb executive can plainly see, then you my friend are just not going to be a priority there. They aren't going to waste resources developing an IT team if the primary business isn't having the best programmers. They can just ship it off to China and get a horribly coded mess that looks fine and functions fine. They don't care how many div tags there are.
However for consulting, having better programmers directly translates to money, so investing in them makes more business sense. Better programmers often means faster turn around and more satisfied customers. Obviously the more hours you work, the more hours they can bill, so it also makes business sense to work you to death.
It's about finding the right place to work, in-house at Google is probably better than in-house at Jake Fish Fry Emporium. Contracting at IBM is probably better than some 24-hour turnaround guaranteed! quick buck dev shop.
I'm starting to think the only way to be happy is work for yourself.