It's definitely correct that physics ph.d's can branch outside of physics and make some real money doing related (to varying extents) work. As tnoviell said, there is use for physics majors in industry in engineering and programming positions, and the same companies also have use for physics Ph.D's. On the other hand, one often-mentioned career path for physics Ph.D's (though not on this thread as of yet) is finance. Now, it seems like a lot of seemingly unrelated work to put yourself through in obtaining a physics Ph.D just to go into finance, but consider the fact that physics grad students (especially experimental ones) have an understanding of mathematics, statistics, data analysis, and rough model-building that surpasses that of a typical finance MS student by orders of magnitude (a couple finance MS students live on my floor, they were reviewing Calc. I coming into the graduate program, just for a matter of comparison). Lets not forget that while you are building your math/statistics skill set, you could actually be doing research you enjoy and making a significant contribution to your field while you are a graduate student. I'll repeat what my current research adviser told me: in physics, the first-tier students often get tenured faculty positions at good schools; the second-tier students will either go into industry or become researchers at national labs; the third-tier students will go into finance, and they will make 10x as much money as anyone in the top two tiers. My adviser said they encourage students who want to follow that path to do so, and they only hope that that student will maintain a certain passion for their original field and eventually funnel some of their exorbitant earnings back into scientific research.
I've heard a lot of "slave-driving" references, but this is not always the case. If you pick an adviser that treats you as such no matter what you do, then you need to switch advisers. My impression I've gotten thus far is this: your ambition and tenacity will largely determine the way in which you are treated by your research adviser. If you come in willing to do whatever it takes to gain an up-to-date understanding of research in your chosen field and are not afraid to bring up ideas and discuss them openly with your adviser, he/she will pick up on it and push you in the right direction to make your graduate career what you want it to turn out to be. But if you simply choose someone who's work you're "sort of interested in" and wait for them to tell you what to do, then that's all you are going to be to that prof: cheap labor. If you don't allow yourself to go into this sort of negative feedback loop where you define yourself as a slave, and in doing so you give the impression that that's all you want out of your graduate experience, then you can really enjoy yourself and make strides towards impacting your field significantly.
tnoviell is also right that grad school must be a sober and pragmatic decision, because it will soak up a chunk of your life, and by todays standards you will be undercompensated for the amount of effort you might be putting into it. But let's not forget a few things: you will be underpaid, but you will also get to do something that most college grads would kill to do--stay in college, for free. In fact, you'll be paid to do so (though not incredibly handsomely, but you'll also still be living like a student for some time, so the money is sufficient). You will have a unique life experience should you continue to pursue scientific research, particularly in the academic setting. Namely, you will be one of the few members of your larger peer group that will not experience the typical 9-to-5 daily grind that defines life for so many people in our society. While most people avoid defining themselves by their job, as it truly is nothing more than a way to ensure continued sustenance and survival in between the few moments of recreation life affords, you will quite possibly take pride in your career, defining yourself by your passion for discovery and the utilization of your time for the greater good, not just to draw a paycheck. So perhaps some of this is whimsical, and I will certainly concede that scientists should be paid more (as should teachers), but I think those of us who willingly put ourselves through the academic ringer are providing ourselves with opportunities to experience life in ways that not many people will ever have a chance to experience.