I don't have a problem with contract winemaking. Especially for smaller producers, it allows them to show an expression of their vineyard, with winemaking inputs where desired by the winemaker. For example, there's a very good contract winemaker in the Perth Hills who is making at least half of the region's output (by my reckoning) and the variety is not only a good thing, but keeps the husband and wife team (both winemakers) interested.
Frequently these decisions are commercial; i.e. hand over your fruit and get a percentage of it back as bottled wine.
Wine, women and song. Ideally, you can do all three at once.