I'm not sure that "never" is a good word to use, here. There are many cases I can think of where it'd be worth your while to negotiate your freelance rate:
- The client is a non-profit or under-funded project that has little money but you can help out because you support the good they're trying to do in the world.
- The client is offering you a huge chunk of work, and the overhead they're removing from your life (finding other clients to fill the time, for example) is worth a few bucks off of your hourly rate.
- The client can offer other incentives to offset the hourly discount. Like a client that wants you to work from the office all the time might be willing to let you work from home.
- It's a project you really want to work on and that's the only way to make it work.
"Clients obsessed with nickel and diming are pathological." This is nonsense. Clients -- just like you -- have every right to negotiate. But freelancers who are unwilling to be flexible when dealing with their clients are, to quote South Park, "going to have a bad time."
On your first and last points, my general rule is that I either work for my full rate or for free. I find it much simpler and less stressful to make a clean divide between things I'm doing because I believe in them, and things I'm doing because I want to make a comfortable living and advance my business.
In the middle territory, no one wins. You'll have expectations placed on you because you're being paid something, but it won't be enough for you to put in a professional level of focus.
When you do these kinds of projects for free instead, you get a lot of goodwill in return and you aren't burdened by unrealistic expectations that can add stress and interfere with your bottom line. It also forces you to decide if it's really something you believe in, or just a sub-par arrangement that you're getting pressured into.
- The client is a non-profit or under-funded project that has little money but you can help out because you support the good they're trying to do in the world.
- The client is offering you a huge chunk of work, and the overhead they're removing from your life (finding other clients to fill the time, for example) is worth a few bucks off of your hourly rate.
- The client can offer other incentives to offset the hourly discount. Like a client that wants you to work from the office all the time might be willing to let you work from home.
- It's a project you really want to work on and that's the only way to make it work.
"Clients obsessed with nickel and diming are pathological." This is nonsense. Clients -- just like you -- have every right to negotiate. But freelancers who are unwilling to be flexible when dealing with their clients are, to quote South Park, "going to have a bad time."