If I understand correctly, what you're saying is "the industry is bad, but it couldn't exist otherwise".
Isn't that the same as a factory that uses slave labour? If it didn't have slaves, it wouldn't be profitable and would fold. If the factory folded, you wouldn't be able to buy the ivory chess sets it was making. Paying for the skill required to make the chess sets is too expensive for the factory. Therefore it's OK to have slavery.
Slavery is great, but it was outlawed. Any company that depended on slave labour - folded. And that's a good thing. And we're still here, and we can live without ivory chess sets made by slaves.
(Note: I wish slave labour was gone from the world - it's still used in many parts of the world. But I'm not sure "the company would fold" or "if you live in this country you can expect to be a slave" are good excuses for it).
In other words, personally I could live without AAA titles made by slaves. There are a few game companies that somehow manage to make good games without killing their staff.