Another title for this post might be, "Only An Idiot Doesn't Self-Publish".
It doesn't take a genius to see that there's a lot less work out there for freelance RPG writers. White Wolf has scaled back its once prodigious release schedule. Companies like AEG, Fantasy Flight, and Sword & Sorcery are either completely out of the RPG business or producing a shadow of their previous output. SJG's GURPS schedule has slowed to a crawl. Across the business, there are fewer and fewer companies committed to RPGs. Five years ago, it was possible for a freelancer to make a full-time living writing RPGs. Today, it's doubtful that any freelancer who focuses on RPGs pulls in more than $35,000 a year. A would-be fulltimer has to hope to get enough work from Mongoose and WotC to pay all his bills. Everyone else simply doesn't have enough work to hand out or is a risky proposition when it comes to payment. It's telling that names that I used to see on a lot of RPG books (Robin Laws, Matt Forbeck, Aaron Rosenberg) are showing up on novels, usually shared worlds stuff. The RPG market simply isn't there anymore.
As companies drop like flies and a print RPG product reaches a smaller and smaller audience, it becomes less and less worthwhile to freelance. Freelance work is a good way to get someone else to pay you to learn how to write and design stuff. You trade the rights to your work, along with creative control, in return for a paycheck and the experience of writing a book and designing RPG rules. If you pick the right company, you can also have the publisher promote you and your work. But once you've learned what you can, chances are that freelance work quickly becomes a waste of your time.
The dirty little secret of RPG writing is that it has an incredibly low ceiling. Once you have maybe 10 credits to your name, you're not going to get any more famous unless:
A) the book you work on is a massive hit and
B) you coincidentally work with a publisher that actually pushes designers as stars or
C) you're an incorrigible loud mouth who doesn't give a crap about the malfunctioning personalities in this industry
For those scoring at home, I fall into category C. Stuff I wrote generally received good reviews, and more people liked it than disliked it, but I never strode Moses-like down the mountain to give gamers THE WORD, such as it is. I had a bit of a rep on RPG.net and Gamingoutpost.com before I started writing, and I think that helped. This was always a lark for me, and I never particularly cared to kiss up to people or say things that people really, really disagreed with. Even if I was right. At least some of the time. Or maybe, like, once... OK, I'll quit while I'm ahead.
There is one good reason to freelance: you get to work on games that other people own. If you really like Vampire, HERO, D&D, or whatever, freelancing is like the ultimate fan experience. Not only do you get to play the game, you get to tinker around with everyone's campaign. It's cool to turn a hobby into something pays money, and even cooler to help shape the game you love.
But, aside from that benefit, there's really no reason to freelance.
There's not much work out there.
The work out there pays poorly. Compared to commercial freelance writing, it's hideous.
RPG companies short of WW, Malhavoc, Mongoose, and WotC can't reach more than a couple thousand people, tops.
Companies have an alarming tendency to not pay.
And yet, people like Luke Crane, Vincent Baker, Chad Underkoffler, Jared Sorensen, and others self-publish, reach as many people as what passes for a second tier print publisher, and make a half-decent income from their work, more over time than they would as a freelancer. They aren't doing this full-time, but you can't freelance full-time unless you're already established in this business. People like John Snead and Ari Marmell have been in the business for years, long enough to make contacts and win that steady stream of work. But if you aren't already there, you won't be there.
That bears repeating:
If you aren't working full-time as a freelance RPG designer right now, you won't be working as a full-time freelancer any time in the next few years.
The dream's dead, kids. The reason to freelance in the past, aside from working on a game you love that someone else owns, was to reach that brass ring and design games for a living. You can't do that anymore. Stop trying to.
Given these things, it makes no sense to freelance. It's done. The party's over. Wait for the next batch of companies to jump into the market, or for companies to start investing in RPG lines again.