1) There are a lot of jobs for people with an MS, the hardest part is getting the initial experience though.
2)Pay seems to be all over the place, I make 65k in an expensive city right now. I have had a lot of recruiters contact me with offers that are close to double what I make currently, but they want a couple years of experience first. However, I also see a lot of jobs that require experience that are paying the same or less than what I make now.
3)I don't think there is that much of an oversupply yet, but since a lot of biotechs don't want to pay decent wages and can't get bioinfo. people with what they're offering, they often just grab a bench scientist that has a little bit of coding experience.
4)Yes, there is much less respect from bench scientists and they look at you as a tool to accomplish what they want to accomplish.
Working conditions only seem so bad because of where you are coming from. The conditions are very typical for biotech, if not slightly better (low pay, not a lot of freedom, requires extensive education). I've actually been looking for a good analysis on biotech wages compared to other industries for awhile - so if anyone has one, feel free to pass along.
I came from the bio side, so I got my MS in bioinformatics specifically because it is so interdisciplinary. I doubt I will stay in this industry for the entirety of my working career, likely will move over to health-tech or try my hand at a start-up focusing on services for bioinformatics.