Yes indeed that is sad. But I suppose this is happening in your case because your developers do not work for your company. They are a vendor.
For agile’s primary premise to work, the reward system must be appropriately designed and linked. It is difficult enough in a big corporate; even harder when the developers are hired guns. How will they care about your customers when they aren’t even entitled to promotions within your company?
Agile is a ideal best that presupposes lot of things — small, nimble and dedicated teams, minimal legacy issues, tolerance for bugs or errors in initial releases etc. etc.
Not always applicable in enterprise projects..