The "suck it up and be happy you have a job" was almost the exact phrase our VP issued down a few months ago, along with "if you don't want to be here to make all our dreams come true, go somewhere else". The problem is that our company relies on a fair bit of "rockstar" technology talent to make things happen, and even with so many people unemployed, it's not that easy to find qualified people at that level (there is, however, a metric ton of mediocre talent, and people who think they're way better than they really are out there). So, the rockstars find they can locate other good jobs with some relative ease (being rockstars and all) and take that VP's message to heart.
Making profit is important, maybe the most important thing to a company. But if you start treating your employees like unwanted burdens and making it feel like a prison instead of a good place to spend 8-10 hours of your day, the ones you want to keep WILL leave simply because they can, and you will be left with the ones you really don't care about because they're too much like all the other "just average" employees out there to find anything else. You won't be able to reliably acquire new rockstars either, because by that point in their career they can smell a shithole a mile away.
I'm not suggesting every office needs to be an arcade, or that you have to make lavish expenses routinely. But little things like free coffee, bagels once a week, reasonable but not totally locked down Internet policies, etc go a long way. I fully expect that I can hit gmail or slashdot from time to time - I don't spend my whole day on there, but my productivity is worse if I can't break my mind away from other more tedious things. This is pretty normal human behavior. As long as I'm getting my work done and not violating HR use policies (porn, etc), the rest should take care of itself. Employees that can't find that balance will magically disappear at the next round of layoffs anyway.
Be in business to make money. Don't forget that upper management can't do the job alone, and don't chase away anyone with the innovation and talent to get you there just because you tried to scrape the barrel. Ruthless profiteering may work in the short term, but rarely retains the kind of people you need to have except in a rare few business cases.