We are genetically predisposed to eat meat... and for good reason. It's our heritage and yet, we can choose to eat vegetarian if we wish. I was raised on meat and I just can't deny the fact that I love how it tastes. A properly cooked filet mignon is like heaven.

And you're absolutely right, that we can farm animals ethically, minimal cruelty. After all, animals die all the time in the wild. But in the snare of a predator, they're usually killed off quickly (a live prey can be dangerous to the predator). If companies weren't so profit optimization obsessed, there wouldn't be the cruelty going on that we see today. Animals would live humanely for a reasonable stretch and then be dispatched with minimal pain.
I believe in capitalism, as long as it's properly governed. We're just unfortunately not at the social evolutionary point where humans can be inherently trusted. We will go awry when the opportunity to do so exists. But as long as leaders (business and politics) subscribe to the belief that we can get away with minimal government at this point, we'll keep struggling. Technological evolution is not enough. Social intelligence must be equally evolved to emotional. Once there, I believe that we'll see problems like this fade away. But it's a long, long way off.
@Jayson1 - I don't think we can go back to the way things were considering the scale. Maybe in very small communities where the population levels can support it. But on the larger scale, the food production needs are too great.