The problem I have with this argument is that it always seems to me to focus on the life of the animal, but not on the death of the animal.
All animals eventually die, and most natural deaths are far more horrifying than how we slaughter animals, especially in modern times (though even traditional slaughter is nothing compared to starving to death, being eaten alive by insects, being hunted and terrified by a predator etc).
So, I think that it is important how the animals are grown (factory farms are absolutely horrible, unacceptable places to live in, and should ideally become illegal sooner rather than later, regardless of the consequences on the price of food). But I really don't think there is any reason to feel bad about the slaughter of animals who have led a decent life, even if it may be shorter than they would expect in nature (the huge proliferation of their species is kind of payment for that, in a way).