To all of those saying that killing for money = bad, I ask, what exactly is it that you think your nation's armed forces do?
Coming from the US, I can say that while some people join the military to "do their duty" and "serve their country", many others join because it is a good job, and a better one than they can attain otherwise. A job, for which they are paid, and during which they are sometimes asked to kill people.
In the case of contractors, along the lines of what John Galt mentioned above, they are filling a niche. There's a certain point where people become very good at what they do. Frequently, in the military, if you become very good at what you do, you either graduate to a desk job, or you get stuck at your salary level so you can play in the dirt and do what you're good at, instead of writing supply requisitions. At that point, is the risk that you're taking in performing your duties worth it at that pay-scale? Maybe "serving your country" isn't providing enough additional worth to keep you going. So, you exit the service, and you take your skills to a private company, that will pay you an amount commensurate with your level of skill, and your level of risk. Market forces at work.
One thing I will say: I'm not against contractors existing, or doing what they do, but I would prefer if, when the US Gov't engages their services, they exert more oversight. If the only reason you're hiring them is that they can get things done due to lax rules, then maybe what you're trying to do isn't exactly on the up-and-up.