Butts in seats don't equal value

During the last year, I've been thinking a lot about why work in general and software development in particular is valued by the time spent instead of the actual value created:

http://wilmsmann.fullmontymedia.com/2012/11/22/fixing-work/

http://wilmsmann.fullmontymedia.com/2012/11/22/butts-in-seats-management/

Software development - probably more than any other service or profession - lends itself particularly well to remote working. Yet, most employers and clients insist on developers working on-site and on paying them by the hour. Sure, there are those who are lucky enough to offer a well-defined product or service that can be priced at its actual value but most developers - entrepreneurs, freelance and employees alike - have to deal with hourly rates.

In my opinion this not only creates wrong incentives, that is to work as long as possible not as efficiently as possible, it also makes you unfree because under these circumstances your revenue and livelihood are inextricably tied to the amount of time you spend working.

This system is quite obviously broken. However, I've come to realize that there's no easy way to fix this. While valuing work by the time spent is a broken metric at least it is a metric. In order to decouple the value of software development (or work in general) from the time spent working one would first have to find a common metric for the actual value created.

What are your thoughts on this?