Mac I would agree with what you say if they were housing a breed not manufactured for confinement. It does not take a geneticist to decide when a hen is content. CX are a good example of a bird that needs confinement and actually perform poorly when not given the goodies they were designed for. They are always breeding new strains of birds to adapt to the cheaper methods of confinement. This should tell one that cages are not ready to go away if geneticists are breeding for confinement.
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I've participated in discussion groups with owners and representatives from several large egg production companies. That argument is often given by those that still use cages or use aviary systems and screened porches to provide token outdoor access for organic production. They feel that keeping the birds off the soil, away from predators, segregated from any manure, in a climate controlled facility is in the best interest of the birds.
Obviously there is more to it than that though... Animals need to be able to express their natural behaviors. For chickens, that consists of scratching, running, jumping, and socializing with the rest of the flock as they see fit. The animal that doesn't have the opportunity for natural behaviors doesn't necessarily adjust to conditions that suppress these behaviors, but reacts with stress and anxiety. While a cage may protect the chicken from disease, chickens that aren't allowed natural movements such as running and jumping also have problems with muscular and skeletal development.
While you may think that this is all emotionally pleasing "fluff", I have attended lectures and personally spoken with some of the top geneticists in the poultry industry. These folks are running the industry breeding programs and are not only breeding for efficiency in production, but are also breeding for behavioral aspects. They understand the behavioral aspects of chickens in production settings better than anybody and will tell you much of the same.