Some companies might do this, but this hasn't been our experience. It's the opposite. Companies VASTLY prefer full-time employees for software developers because it is so costly when they leave. They want devs to stay forever. They almost always convert contractors to FTE within the first couple fo months. They want to get the golden hand-cuffs in place ASAP.

Counterpoint: I used to be a contractor and took C2H positions to see if I wanted to work with these people long term. Most of the time, I was happy to see the door when the contract ended, though all of them offered a conversion.

There was one where I converted to full time, and then we got hit with the dot com crash, so that sucked.

That seems like a bad deal for the company. Even though the person is a contractor, you just trained and ramped them up for the last few months. Now, when they are most productive, you are going to let them go, and replace them with somebody who you will have to train and ramp up all over again.

why wouldn't they just hire contractors who don't expect to ever be hired?