I went through an unfunded 2-year MS program with a thesis option. I got coursework (something I wanted, as I wanted a stronger foundation in Psychology before starting a PhD program), got to "try out" being a grad student in Psych and seeing if this is something I wanted to commit to for the next 6 years, got some teaching experience and lecturing experience by working as a TA for other graduate classes, and got to explore different areas of Psychology. I also had a great mentor, who made sure I got research and clinical experiences, let me do an ambitious thesis, and wrote me killer LORs for grad school. I ended up getting into my top choice program, and I'm pretty sure it's partly because of the strong relationship I developed with my mentor.
In my opinion, most people go the RA route, get a poster or two, maybe get their name on a manuscript, and enter grad school just fine. But I really loved the opportunity to do all different things with my time- classwork, research, teaching, clinical work- and figure out what was right for me and what I wanted out of life. I also got to design my thesis from scratch, which you can't really do in an RA/RC position. As far as the funding, I made it work by getting paid TA positions, and other career-related positions that could be put on my CV. And if you go to a program that also has a reputable PhD program, sometimes people will end up staying there for their PhD.
Just some food for thought. At the end of the day, it's important to remember that every lab is different. Some RA/RC positions might give you fantastic opportunities, and some labs within certain master's programs night not- and vice versa. It's really just finding fit for you, whatever that may look like.
