I know of one person that's done this and it was a brutal affair for them.
(Source: I used to work in the industry and stay on top of the indie scene)
It's not much different than writing and editing a novel, or composing, rehearsing, and recording an album. The game industry is very much like the music and literal worlds these days.
You have a pack of companies (fewer and larger over time) and employees thereof who have figured out how to reliably generate cash. Think EA, big record labels, and big publishing houses.
Then you have a vanishingly small number of black swans who beat the odds, get huge, and make a ton of money (usually with the help of the above giant corporations). Think Bieber, Notch, and J.K. Rowling.
And then you have an enormous sea of people toiling in anonymity who will never find much money or an audience. That local band you see loading in at your corner bar. Every game not on the front page of Steam. Self-published fiction on Amazon.
As long as everyone recognizes what group they are in and are OK with it, I don't see the system as being intrinsically bad. Unfortunate that things are so skewed towards the small number of celebrities, but not outright cruel.
Where it gets creepy is when you have companies in the first category sucking money from the last category by promising them that they are in the middle one and encouraging them to make shitty life choices based on that.
There's nothing wrong with doing your weird little creative hobbies without reaching fame or fortune. I've been in local bands and made shareware games. I've written and produced goofy videos. It is all super fun, and I highly encourage anyone to do it. But it would not have been fun if I hung my livelihood on income from them, or defined my person sense of "success" in terms of audience size.
Ten years ago we were promised that personalized recommendations and discoverability of the long tail would make this happen, and we're still waiting.
Either way I agree though, it's a brutal space if you aren't aware of the 90/10 revenue split across the industry.
90% of indie devs I know want to do the latter because sharing their game/art/vision and seeing people experience it is the goal. Totally fine to do gamedev as a hobby but that's something discretely different from being an independent game developer.
You're right though that I may not count as a real indie game developer since I do it purely for fun.
Nuclear Throne is something I'd consider "shipped". It's polished, the design is solid and it's currently sustaining Vlambeer commercially. Compare that to their prototype(wasteland) and you'd get an idea on the difference(also ~2 years dev time if I recall correctly).
[edit]
I can also highly recommend watching anything from Rami Ismail of Vlambeer. He's brutally honest about the realities of being an indie developer and the mindset you need to be successful.
[1] https://vlambeer.itch.io/wasteland-kings
[2] http://store.steampowered.com/app/242680/Nuclear_Throne/
People often put this burden on themselves "we must ship and make money" when there is much more enjoyment out of just working on stuff when you feel like it. Learning new things like art, music, game design and sound effects. It's all quite fun if you have the right mindset!
People do this when working on the random open source project, why is this considered weird when you're talking about making games?