It's not insulting at all. Those are standard terms for this type of work, as your work would be useless to them otherwise.
It may not seem as serious with a brochure or one-time ad, but imagine if you retained the copyrights and trademark rights to the client's company logo. Then every time they used the logo, they'd need to get your prior permission or risk violating your trademark. Every time they transferred the digital artwork, they'd be risking copyright infringement. That's hardly a viable business arrangement.
The fact that this doesn't seem to be common sense (professional ethics really) to all designers is precisely the reason the client has to spell this out. I've personally encountered quite a few clients who've been burned in this way. They spend thousands of dollars on branding design, and all they get are flat PNGs, or worse—JPEGs. Some printers who offer design services also use this as a method of vendor lock-in.
There really is no good reason for a designer to not agree to not operate under these terms whether the client explicitly requests it or not. After all:
- You're already getting paid for the services rendered. What reasons do you have to retain the copyrights?
- The digital artwork (collected for output) is in this case the very deliverable that they're paying for. A flattened image, a password-protected file, or a partial design will either cause potential problems down the road or simply be useless to the client.
- Handing over the masters, or at least a copy of them, concludes the business transaction and relieves you of the responsibility of holding on to them for safekeeping in case alterations/corrections need to be made.
- One of the worse scenarios I've dealt with was a designer who sent only a flattened image (saved in PSD form for no apparent reason) and then promptly lost or deleted the master files. Well, the flattened design, in addition to being less than ideal for printing, turned out to have an error in the copy. This resulted in a costly process where the designer basically had to re-create the design from scratch, delaying the project.
- Portfolio rights (essentially a special reproduction license given to the designer) are separate from copyright. It is customary for the designer to retain portfolio rights after handing over copyrights to the client.
There are however some secondary artifacts that are negotiable. For instance, in web development a distinction is made between the design and content on the site, which are clearly copyrighted by the client, and the code the site runs on, which the client is usually only licensed to use. It may be a conglomerate of open source projects (WordPress, jQuery, Compass, etc.), or it may be proprietary code that the developer is giving the client a singular license to use on that particular site. Done correctly, this lowers the cost for individual clients and additionally saves the developer time while delivering a superior product to all clients.
Likewise, many designers choose to retain the copyrights to unused designs from a project or brushes, photos, and other reusable stock resources that are used in the final product. But if you want to both charge for work and still retain ownership, you should spell that out explicitly in the contract to avoid any misunderstanding that could result in unpleasant surprises for the client.