I think it's interesting to compare the House Elves of Harry Potter to more traditional serving pixies, brownies and whatnot. Now, I'm not familiar enough with British lore to name any of these good spirits, but there is in swedish tradition a small creauture called "tomten". Their name is today the same as Santa Claus's, but they started out a lot different.
Small, gnarly, pretty ugly and grouche little men (a bit over knee height often) who lived in the stables. They cared for the animals, they helped to keep the well clean and were generally useful - but you never saw them. Neither does most students at Hogwarts seem to see the House Elves.
They could however also punish the farm if things were misbehaved. If they were disrespected, not given their milk and porridge properly, if it was dirty in the stable etc. These are mostly common sense things; you can't have a complete mess and underfed animals and expect things to go your way. But their tricks were often mischevious and sometimes malicious - which I think relates pretty well to Dobby's treatment of Harry and later Kreacher.

Maybe House Elves do like to serve, but only masters of their own choosing, who keep up to certain standards? And if the wizards found it annoying to have these quite powerful spirits living in their houses and messing things up when they misbehaved, I do think they would have used spells/selective breeding to make the elves easier to control