I've worked as contractor, then consultant, now employee, at different places. Even with my skills and motivation remaining the same, one thing I've noticed as an employee is that the company trusts and believes me less than it does consultants.
With three years of specific knowledge in the design, implementation, and support details of our actual network, I can tell them that solution X won't be a good fit for us and they'll ignore it. An IBM consultant can come in an do a week of interviews, two weeks of reading documentation, and tell them the same exact thing I did, but now they take it very seriously. It's not about skills or experience - four years ago I was that IBM consultant. It's about context.
They're paying me a moderate amount to work on whatever projects my supervisor assigns to me, and they'll keep on paying me that same moderate amount unless I do something really awful. They're paying the consultant(s) a huge amount specifically for the task of investigating this option and delivering a formal recommendation. They can document somewhere that "senior management engaged a highly regarded firm to evaluate the options and said firm provided the attached 75 page recommendation" - as opposed to "one of the guys from the network department told us our idea was dumb." Also, if they're paying $200/hour for advice, they'll take it more seriously than advice they're "getting for free" (obviously salaries aren't free, but there's no marginal dollar cost for additional work)
Similarly, not all employees are created equal, and again context matters. Being in a Profit Center rather than a Cost Center makes a huge difference. In a profit center, they want the best possible perceived quality, since that can translate into increased profits. In a cost center, they basically want people who are good enough not to screw anything up, but there's no point in spending extra on excellence.
Note that I said perceived quality. For both consultants and employees, Perceived Value is more important to your advancement and compensation than Actual Value. This leads to TFA's perception that having actual value doesn't matter, but it's not quite that simple. I still feel better about my job when I know I'm doing it well and providing value to the company, and that's a good thing. But if I don't help my management to see that, and some charismatic underachiever puts all his effort into appearing valuable, I won't be all that shocked when he gets promoted and I don't.
There's no easy rules about unions good/bad or consultants good/bad or working "hard" good/bad, it's the context that matters.