If you are a valid contractor, you should be treated as one.
But I think it again boils down to the fact that whoever (the MSO or the prime) decides to micro-manage a contractor as an employee doesn't have business sense at all. And Yes, I agree that the customer-made pricing is screwed up, but it's here to stay. It's been that way in CA for many years. We are very careful about who we work for, and under what pricing. I can't work for free, so I don't expect others to have to as well.
Sorry to hear about such "disrespect" you've all faced.
This is a crappy industry, it's run by jerks, criminals, and many other bad seeds.
Re: Pay more, end of story.
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