That depends on what you mean by 'thrive'?
If it destroys the ecology that was there before, it's not only wrong, but eventually fatal.
Two things: 1. Distinguish types of 'farm animal'. I have no problem with horses kept for riding or pulling; sheep and llamas kept for wool, cows and goats kept for milk, hens or geese for the eggs. (The male offspring would still have to be killed young because of the feed, tending and grazing, as well as the rivalry among them, so they wouldn't have much to thriving time.) I'm not sure old cows and sheep would be very palatable, but I suppose you could eat them once they've had a long and happy life. I do have a problem with animals bred and kept for no other reason than to be killed young, for their flesh: pigs, steers, waterfowl, turkeys.
But my aesthetic objection to breeding and raising animals in order to be killed, even if humanely, is the lesser of the problems.
2. Keeping farm animals in conditions that I could describe as "a good life" is a whole lot less economical than factory farming. It's just not commercially feasible in the world as we find it. (I can imagine changes that would make it feasible, including wide-spread permaculture, but the current economic structure does not encourage alternative methods. I think the movement started half a century too late.)
The biggest obstacle of all is the sheer number of humans demanding a meat-heavy diet. To meet that demand, you need to produce on a scale that's impossible to sustain through humane and ecologically sound farming practices. If the demand were reduced by 90%, we could manage. (Though there still remains the problem of all those billions of carnivorous pets.)
I had not previously made a moral argument. I do have convictions on the matter, and do grapple with compromise. I have not found a way to live in the world without compromises, some of which are uncomfortable.