I have never taken on contract work, so I shall treat your use of 'you' as a broader point to all contractors.
They did not set up a company that doesn't give them employment rights. They do seek to provide those employment rights but doing so requires funds. The issue with IR35 is that it doesn't consider the necessary cost of those rights a valid expense, and so requires their provision to be made from post-tax income.
This is contrary to all established practice, be it accounting, employment law or indeed how any other employee across the country is treated.