YES! It is possible to earn a decent amount of money from freelance writing. Some may even make a full time income as a writer. This assertion is based on several different aspects of research and/or experience:
Bid Sites. If you've ever visited bid sites, which are sites where people go to hire all kinds of contractors (writers, designers, programmers, virtual assistants, etc), you know that some of these sites list each individual provider's money earned via the site.
After a writer (for example) wins a project, and completes it, the buyer pays the writer. Sometimes the buyer pays the writer through the bid site's secure system. If this happens, the bid site adds that payment to the writers "earned total," and displays it for all the world to see.
Want to get on the bidsite bandwagon? It's really simple to get started.
Word of Mouth. Luckily, the internet offers quite a community of writers to partner and commiserate with, in the form of both blogs and forums. For example, I found this blogger who makes over $5,000 a month in freelance writing and blogging monies. Now, I cannot discern from his blog how long he's been at this, or how many hours per week he works, but I do know that the stats are out there.
Informal Community Polling. I recently polled a community of writers that I belong to about their income. I asked them to anonymously reveal how much money they brought in per month.
Of this small, obviously non-scientific sampling, 44% averaged under $1000/month, 27% brought in between $1000 and $2000 per month, and 28% brought in over $2000 per month. Keep in mind that less than half of these respondents worked 8 hours/day on average, and less than half had more than one year of experience.
Bottom line: you can earn money, and it can be a decent living wage for you. However, like any career, you need to be willing to put in the time, commitment and years of service to develop your craft, hone your skills, sell your work, and make valuable contacts.