Surrogacy is legal and moral, but it needs to be confined to certain parameters. We need not to make it an assembly line procedure that smacks of some sort of prostitution. The very term baby factory makes it a sort of industrialized practice where individual choice and selection is removed.
No having surrogates should not be illegal because those that want biological children should have the opportunity to do so. If someone is willing to go through the pains baring a child and giving birth to that child of their own volition, is their own right. Sure we have adoption issues in the world but not everyone wants to raise someone else child.