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.