To me, what makes the most sense from an animal-rights standpoint is to eat meat, dairy and eggs that are produced under humane conditions.
My sons and I had a debate about this when my younger son was a vegetarian. My older son pointed out that if fewer people ate meat, more cows wouldn't be living long happy lives -- there would be fewer cows, period. Ranchers are not going to raise them just to be nice. If nobody ate meat (or dairy, or wore leather) the cow population would dwindle to -- what, a handful in zoos?
So then the question becomes, from the cow's point of view, is it better to live, but eventually be killed for meat, or not to live at all? I think when cows (and chickens, pigs, etc.) are raised and slaughtered under the horrible conditions we hear about, they might feel it's better not to live at all. But if they live happily and comfortably, you could argue that you're giving them a chance to experience life.
I know not everybody will see it that way, but it is one way to look at it. The other problem is it's hard to ascertain just how your meat has been raised. I have read that truly cage-free eggs, for instance, are really hard to come by, even though many eggs in the store are labeled as such.