They still don't enjoy the work, even if they find doing it instrumentally rational. They are forced to do it by circumstances, and in a better world they wouldn't be.
But in a world with house elves, they are even worse off - they are just unemployed, rather than having the option of taking the job. I doubt more than a trifling amount of the money saved by Hogwarts trickles down to them.
I realise that considering the effect of house elves on the job market goes far outside the scope of this problem in the philosophy of consciousness, and much far outside the scope of the Potterverse; but once you start taking into account the welfare of the hypothetical replacements for house elves, there's no real way to dodge the question.
For philosophical debates, it's probably better to stick with the pig that wants to be eaten.
ETA: There is now a third thread, so send new comments there.
Since the first thread has exceeded 500 comments, it seems time for a new one, with Eliezer's just-posted Chapter 33 & 34 to kick things off.
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