It's a matter of scale.
There was a pig (and other animals) farmer who used to have a really good blog. One of the practices he used was to get free discarded milk and by-products from a local dairy to feed his pigs. Instead of the dairy having to pay to discard about-to-spoil whey, for example, he would just accept a few tons of it and feed it to his animals. But that only goes so far, and the supply has to be local or it becomes too expensive to truck in.
You can feed your cows on grass, but the animal density has to be much lower, or the grass will be under so much pressure that it will die out from overgrazing.
Likewise, you can pasture-raise chickens and the eggs/meat are tastier for it, but the number of chickens/sq yd of pasture is much less than you can squeeze into an indoors "battery operation."
If you are concerned with animal welfare -- and I firmly believe that you should be -- these things are difficult problems. On the one hand you want to raise animals in a sustainable manner that allows them a good, if short, life, but on the other, your customers need to be able to afford the food you provide. And it's that final point that is stopping many farmers from doing it.