I'm pro-rodeo. When I was younger I felt the way the OP did, but now that I've been around more rodeos I've changed my mind. The stock really do seem to love what they do.
There's a new show on TV, Life on the Circuit, as I recall, and it's all about the rodeo. The episode on today had a piece on where the animals used in rodeos came from. It may not be the same in Aus, but in Canada, the horses used in rodeos live out in the pasture 50 weeks out of the year, and the owners are paid for the quality of horse they produce. They chose horse specifically, as others have said, and breed for heavier horses that have strong legs and are able to produce a lot of power. They also mentioned how often & how much they were fed...although I can't recall the exact details.