Also you can fix some false negatives - allow people to interview again for other positions at the company. I've seen multiple people get hired on the 2nd or 3rd time around and ultimately be successful.
When we first got married my wife was really hestitant about me working on contract. Over the years, she's seen how much larger my checks are when I do.
Besides, there are some opportunities where companies just want someone to come in, fix a problem and then after that it's just boring maintenance work. If it's a contract, I can come in, fix the problem, and look for a more interesting full time job without being labeled a "job hopper". I can just put on my resume that the 6 month job was a contract.
I prefer contracting but I found that more companies are willing to pay me my minimum salary than the commensurate hourly rate I ask for to make up for the possible gap in employment, unpaid time off, and self employment taxes.
But, my wife has a stable government job with decent benefits that allows me to go back and forth between contracting and permanent and allows me to take risks working at companies that pique my interest without concern about the long term viability of my job.