You pretty much nailed it Patrick. I'm the principle at a small software consultancy (20 people) based in Toronto. Unlike you Patrick I mostly hang out with people who run/own services businesses. I live in a pretty big city, so my circle of friends who work at services businesses is big enough to have a lot of visibility into how the rest of their agencies work. Most of these guys do very well by any measure. Using money as the metric they do extremely well. Not Zuck-style well, but I don't hear any of them complaining about their lifestyle...
To other commenters:
There is lots about a service business that is difficult. Most posters on HN hit the big ones over and over again, i.e. - getting customers & scalability. As a services business guy, I look at product businesses and think there is quite a bit about them that seems ridiculously difficult too. Something for everyone I guess?