Here's the thing, you feel conflicted but you don't work for free according to your own description. You work for the friend rate. The friend rate is prevalent anywhere you go. It doesn't have to be some artistic discipline. You are at least working for money.
Now my band of the past two years has employed artists and photographers at the friend rate (or normal rate) many, many times. Keep in mind, this is a band, a "business" entity that makes no money, is still technically paying for the artistic services it receives. I've got no problem with that and hope that arrangement continues in the future.
What I do have a problem with is that the norm in our scene is that, at best, all venues and promoters expect us to play for free or expect us to do all the work selling tickets while keeping none of the profit, and potentially take ticket sales at a loss.
This is the environment of most local music nowadays. It encompasses the entire artistic scene.
For me this is just a hobby though, so I don't get quite up in arms about it. There are, however, all the other ones that hope to do this for a living, and prospectively all the music of the next generation starts here, so I think it's kind of a big deal.