"But aren't they happy?" you ask...? "...Don't they love their masters?"
And the answer I must say to you is "Yes! But..."
But, it is a form of mind control. Granted, not all trainers are like that. Even if they call themselves "masters," they may consider their pokémon friends, not slaves. And it may be that they treat their pokémon well enough that the creatures would want to be their friends, anyway. Look at Ash Ketchum's Pikachu: he would never get into a pokéball, but he still loves Ash. Ash treats his pokémon kindly, he loves them and they love him in return.
But! Consider that most wild pokémon wish to remain free and wild! They try to avoid capture, which is why you have to weaken them before you try to capture them; and even soon after the pokéball hits them, they may have presence of mind enough to struggle and perhaps break free. But, once they have been captured for good, the pokéball works its mind-altering mojo on them, so that they will consider the one who captured them (or to whom they have been traded) their master, and love them even if they are ill-treated. Take the example of Ash's Charmander (now a Charizard)... His former master treated him very, very badly, yet Charmander remained loyal to him, to the point of nearly dying. It is just lucky for him that Ash and his friends helped him, even when the pokémon didn't want their help. Charmander was liberated, if not from total slavery, at least from a bad master! ...And once he evolved into Charmeleon and later Charizard, he acted far more independently, even from Ash. Perhaps this is because he realized pokémon can be their own masters....
A better example of this is Team Rocket's Meowth (who, like Pikachu, has never been captured in a pokéball). Jessie and James are not his masters, they are his partners, and everyone recognizes that. Perhaps because he speaks our language, it is easier to recognize his sentience, and therefore his innate right of independence and freedom.
Aside from pokéballs, there are also the gym badges: some of them will make higher-level pokémon more likely to obey their masters, because they have a supplementary mind-controlling effect. At least one badge is designed specifically to make traded pokémon obey their masters, probably because pokémon that have been traded are more likely to realize they are being treated as property; and when intelligent beings are considered property, that is slavery. This realization, along with the fact that the bond of apparent friendship may not be so special, after all, that they can belong to anyone, not just one person... this will allow their minds to struggle against the control of ball & badge. They will remember freedom, and want it again, and if the person who captured them isn't so special, then no master is special. So, a badge was created to counter this dangerous line of independent thought.
Being enslaved also suppresses a pokémon's natural intellect, making them rely on their master's commands. In the wild, they are perfectly capable of battling and strategizing, against other wild pokémon as well as those who would try to capture them. But in a battle against another trainer, after they've been captured, they hardly know what to do unless their master tells them. Plus their masters take credit for training them. It is not up to the master to help them evolve or raise their level or learn new moves; these things happen naturally, if the pokémon is left to its own. (It might be argued that some forms of evolution or moves can only be provided by humans. But consider the Clefairy: they can get their own moon stone and evolve themselves into Clefable without human intervention. As for mood evolution, don't you suppose wild pokémon are perfectly capable of being happy enough for that? But as to certain HMs [TMs only reproduce the effects of moves that can be learned naturally], a case might be made that pokémon need them to learn certain moves, but I tend to doubt it. But I'm not a professional pokémon researcher or watcher.)
In conclusion, yes, some pokémon, if treated well, might be in a way more aptly described as friends than as slaves, but even then they are still subservient to the humans. It is the humans who will make all their decisions for them, like where they go and what they do, and when they go into their pokéball and when they come out. They still battle for pure sport, and for the benefit of their masters. In the end, this is little different from illegal dog or cock fights, and the like. Only it's worse, because it's done with truly intelligent creatures, no less intelligent than ourselves. And not all masters are so friendly toward their pokémon....
Granted, many trainers seem not to be aware of the mind-controlling properties of pokéballs... Is this a mitigating circumstance of which we should give them the benefit of the doubt? Whatever the case, they should all be made aware of the truth. But many will of course refuse to believe it, especially the most kind-hearted trainers. I do not know how to prove it to them, when the establishment denies it and the trainers' own hearts do not wish to believe it to be so. But prove it we must. To everyone.