On the product end of things a fixed price makes a lot of sense. Squeejee builds custom web applications...billing hourly for that is a no brainer.
Much of everything else is a hybrid. I would expect that I could get a reasonably accurate estimate for painting my house based on the experience of a painter. With a fixed set of requirements and a familiar problem domain, I would think Squeejee could do the same.
More common these days are some user stories and lots of rapid iterations until the client is happy I guess.
No painter would give an estimate for painting a house, sight unseen, with only vague descriptors. But yet that's exactly what fixed-bid contracting is for software development.
For the sake of a client, a programmer with some expertise should be able to give a reasonable estimate based on a set of requirements.
I would say your house painter analogy fails as well. Fixed-bid contracting for software development is nothing like painting a house sight unseen, with only vague descriptors. Analogies aren't really the point though...