zerograv,
AC power generation and systems on aircraft are used for reasons of efficiency and weight. DC is needed for systems that require it and, is generally derived from Transformer rectifiers. Of course, the DC battery is usually used as a power source for starting a fully shut-down aircraft and, linked into the DC system, it can act as a limited power source in malfunctions. To back this up, there are usually Inverters to provide AC for certain equipment where/when it is not available from the normal AC Generators. AC power supplies on large aircraft can usually be paralleled and the AC system will normally be operated in parallel.
You are correct that "contactors" can have switching or latching failures. In fact, all components can fail. Where faults occur, it may be that a generator cannot be paralleled. These systems on large aircraft are quite complex but offer large resources of failure mitigation, which is why this apparently serious failure is important. Cheers