I think the IT/Software Engineering paradigm is easy to argue over because there are career paths that fall under both and most devs tend to be biased against what they imagine as the usual IT lead software development: terrible web "apps" that only run correctly on IE6 and Windows XP SP1 (because something hacky they did was broken... er fixed... in SP2). While this is obviously the case sometimes (like at my
local community college), there are in fact IT Departments that turn out honest and decent to quite good software.
Good DBAs for example are programers as SQL is a domain specific programing language and a sufficiently sophisticated database with numerous stored procedures and schemas is a software package in and of itself. At work we have to interface our 3D modelers and architects with the City of LA's oracle network which is as complicated and sophisticated as any software title.
At work I usually develop in Silverlight which, for those who don't have Netflix (self depreciating Silverlight dev humor), is Microsoft's version of Flash. While my code is almost always intended for forward facing apps used by consumers in the wild, the majority of Silverlight devs tend to work on either media players or LOBs (Line of Business software). These are apps that almost never see the light of day and get used by a smaller number of people for critical business functions, i.e. filling out insurance paperwork or doing financial calculations.
Most LOB developers tend to either be freelancers or essentially work in an IT department because they don't work at a dev house. I think its also fairly specific to the MS stack. I don't think there are too many people specializing in LOBs for Macs (since it would make more sense to do a web app at that point but I digress). In my case, even though my work is in fact a product, I happen to work
in the IT Department DUN DUN DUUUUN 
.
I think Joel Spolsky creates a good visual of what this type of work looks like:
From "A Field Guide to Developers"
The big investment banks in New York are considered fairly tough places for programmers. The working conditions are dreadful, with long hours, noisy environments, and tyrannical bosses; programmers are very distinct third-class citizens while the testosterone-crazed apes who actually sell and trade financial instruments are corporate royalty, with $30,000,000 bonuses and all the cheeseburgers they can eat (often delivered by a programmer who happened to be nearby). Thats the stereotype, anyway, so to keep the best developers, investment banks have two strategies: paying a ton of money, and allowing programmers basically free reign to keep rewriting everything over and over again in whatever hot new programming language they feel like learning. Wanna rewrite that whole trading app in Lisp? Whatever. Just get me a goddamned cheeseburger.
Some programmers couldnt care less about what programming language theyre using, but most would just love to have the opportunity to work with exciting new technologies. Today that may be Python or Ruby on Rails; three years ago it was C# and before that Java.
Now, Im not telling you not to use the best tool for the job, and Im not telling you to rewrite in the hot language-du-jour every two years, but if you can find ways for developers to get experience with newer languages, frameworks, and technologies, theyll be happier...
This is kinda how my job works except I get a lot lower pay and in exchange work with nice, friendly, architects (they eat mostly salads). My one year contract is up in two months & I don't plan on being there past that (I'd like to work in a "real" dev house or a few months before going back to school). It can sometimes be a little hard to stay motivated when writing something you don't think will see the light of day, but generally it gets evened out by the fact they don't care if I write it in C#, C++, F#, WPF, MFC, WinForms or in pretty much any other technology that can integrate with their existing Silverlight/Oracle/SQL Server environment. My buddy got to rewrite a GIS web tool in JQuery from the existing ExtJS because of the same mandate (and because he was otherwise bored). Its a very different setup than somewhere like the Adobe Photoshop team.
Anyways, just my experience.
