I don't know enough about it to come down heavily against the agencies, I just get the opinion that it's not right and I wouldn't use them myself - but then I am tempered by the fact that despite having this opinion there are plenty of people who still use these companies. Assuming your solution is to make these types of contracts illegal, I'm not sure what happens to the people and businesses who use them, as in will it have a net positive effect, or not.
A friend of mine, just started his own business in Afghanistan. He's making land mines that look like prayer mats. It's doing quite well. He says Prophets are going through the roof !!
I would make them illegal you're right. Would I feel sorry for agencies shut down? Would I ****. Their business plan is to target the people who are too stupid to know any better or too desperate for work, then exploit them through employment loopholes.