I'm a senior engineer in a leadership role and don't agree, so what?
Contractors are there to provide value for the company, not to please some managers personal feelings. Their benefit to both, meaning to them and the company, is that they do not need to play politics, and a relevant part of their value stems from this (= being an third party opinion that can say things that employees may not want to due to aforementioned politics).
It naturally isn't a black and white thing, but IMO their job shouldn't always be to dance as told from a manager, whom often don't even know how to give that close "dance directions" to pull that puppeteering off.
The writer had already done a successful contract at the company and produced tooling still in use by multiple teams there, and still got called out after this whole affair, so I think we can see it as established that they can be useful and provide value to the company and that the teams they worked with weren't exactly unhappy with the personality and/or work ethic, otherwise getting the second contract quite probably wouldn't have happened in the first place. On the other hand there's a new manager and a black hole of higher ups, one doesn't get much info here about any reasoning of their behavior, but if we can trust in at least a basic level of objectivity (i.e., the rough edges of the story are as told) it's hard to see the full blame at the contractor.
Don't get me wrong companies can certainly do this and this is just describing the smaller safety net contractors have, weighting against their bigger flexibility, bigger pay, but no guarantee in stability of that. That said, it still feels a bit odd for the company to react this way, certainly off-putting, albeit that's not meaning much as I never planned to work there, nor in other such "big-HR" places, as contractor nor as developer anytime soon for completely unrelated reasons. The creating an extra side to this story has IMO a bit of oddity too, but domains are cheap and in the end it's not much practical difference compared to hosting it at an existing site.