I agree with your analysis but it isn't the whole story. Mining has some built-in hedging effects against weak performance of the mined commodity. So people might agree with your calculation and still do contract mining. For example, while it is true that in the current rising market, you probably won't make your investment back in terms of the mined currency, consider the case that the mined token/currency performs badly. If the $ price of Ether is flat while you are mining it the difficulty will grow much slower since there is less incentive to develop better hashing technology and also less incentive to go out and buy more rigs. Because the difficulty is growing slower you may well make a profit, both in Ether and $. In the case where the currency is growing you won't make a profit in the currency (Ether) but you will in the base currency, i.e. $. Was it true in your case? Was mining profitable if you only considered your local non-crypto base currency?