There's a lot of pitfalls to being a contract developer in the games industry - no sick leave, no annual leave, do your own super, and constantly hunting down the next gig.
Working from home would certainly be one of the pluses. But sometimes, working on site in various large (and small) studios can give a wealth of great information and learning experiences where technology is concerned. When working from home it's easy to get set in one steady mindset on how you work and how things should be done.
I've temporarily moved interstate to work at a large company - SEGA - and finally got the opportunity today to work with some of their tech. It blew me away! I can't mention what it is but it does something I haven't really seen do well in any other game, so easily.
The games industry is slowly stepping in line with film, where contracting is the majority of resources. With so many studios closing down, and many small ones starting up, employing fulltime permanent workers is ever so slowly fading.
Having said all that, contracting is hard when you have a family depending on you. I guess I really need to get these next Lylian titles out.