It's kind of a necessity in places with strong employee protection, otherwise companies would have an even harder time hiring. Now, companies can take a chance on someone without risking very much, so I think it's a good thing. Obviously, the companies have to pay new employees the same as the permanent ones and give them the same benefits, sick pay, PTO, etc.
The flipside is that some unscrupulous companies churn employees every six months to avoid having too many permanent full-time employees. Not common in the IT industry though.