I think there are a number of reasons you might want to rent hardware:

1. new coin releases and you want to mine it without having your own hardware/re-assigning your own hardware

2. temporary additional hashrate

3. mining a new/different algorithm for which you don't own hardware

4. just for fun

E.g. I have powered down my own Scrypt miners and occasionally rent just for fun

However, I agree it is clear that the person renting it out is likely to make more than the renter.