A lot of (most?) useful work requires the kind of domain-specific knowledge that can only be built up over a lot of time spent working on a given team/product/codebase. "Renting" programmers here and there on an hourly basis might work fine for basic tasks, but would probably end in frustration for both the employer, who has to deal with a constant stream of random new people, and programmers, who are constantly bouncing from project to project.
That depends. There are a lot of things a "by the hour" programmer can do when guided by domain experts. However a domain expert can only guide a couple such people and you lose their ability to get anything else done.
