In the years of famine, after the Egyptian people no longer had money with which to buy food, they first gave up their assets, including their working cattle, later their land and, eventually, themselves in exchange for food. (Bereishit 47:14-25). At this point, no Egyptian retained any assets or any means of productivity and was, from that time on, completely dependent on Pharaoh for all of his needs.
Our sages describe unearned benefits as נהמא דכיסופא (nehama d'kisufa) or לחם של בושה (lechem shel busha) "bread of shame" (respectively in Aramaic and Hebrew) because our Torah understands and endorses the satisfaction and sense of self-value that comes when we provide for ourselves. A normal phase of human development is when the child begins to differentiate from the parent and insists on doing it "by myself". Nothing is as demoralizing as being condemned to eternal childishness (even though our contemporary entertainment and advertising culture tries to convince us otherwise in its glamorization of the "youth culture").
The Ramchal most clearly describes God's Will to create a being in order for that being to receive the greatest good possible. Defining that "good" as God Himself, the goal is for Man to most closely connect himself to God (דבקות--Devekut). Since distance in spiritual terms is not geometric but, rather, a product of resemblance, we achieve that connection by closely resembling God (as much as is possible for a created, material being). One of the few things we can positively say about God is that His Essence is to not be dependent on any other being. Man, then, can most closely resemble Him along this parameter, thus attaching ourselves to Him (דבקות--Devekut), by reducing our dependence on others to the bare minimum, meaning we become self-sufficient, productive earners rather than passive recipients.
Indeed, Yaakov and his family enter Egypt as honored and privileged guests, the family of Yosef whose insights saved Egypt from its own destruction in the near-universal famine years. However, it's impossible to remain in an environment where human slavery is taken for granted without soon also becoming slaves. And even though this particular enslavement was a necessary step along the way for Bnei Yisrael (the Children of Israel) to become Am Yisrael (the Nation of Israel), slavery and dependence is no state for any human being to be condemned to or even allowed to passively descend to.
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