Has Fortnite been profitable as long as Steam? No. In a decade, do you think Steam will be even bigger? How about Fortnite? Epic is striking while the iron is hot, and their people are very well compensated.
Epic has a "small" very profitable thing called Unreal Engine. Heck, the main idea behind Fortnite was showing Unreal Engine 4 and trying to take away the whole stigma of dude bro graphics from UE3 back when it was Fortnite Save the World.
(and now for the topic in hand)
Regardless, if anyone thought this was not happening, they were lying to themselves. The fast update pace meant that it was more likely than not a reality.
Only surprising thing is some of the upper management calling contractor "bodies". Such peak late-stage capitalism, totally removing the feelings on people and just thinking of them as one-time use people that will be burned out.
About why crunch is bad and hurtful long term for a company: it destroys people both mentally and physically and leads to a continue revolving door of people in the company (as they just get the cash and then crash out after surviving it for a little bit), being inefficient in the process. An experienced happy worker is better than 3 new (even with previous experience in the field) that is stressed out of its life.
Crunch is a "short term" solution for a flaw in management (bad planning, issues in production / downstream that were not projected) that is used too much in the long term. Crunch leads to major long term issues that make it so that management (and top people) have less experience leading to more crunch.